Question: Please Bold the final answer Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are

 Please Bold the final answer Based on current dividend yields and

Please Bold the final answer

Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are 9.5% and 12.5%, respectively. The beta of A is 0.8, while that of B is 1.7. The T-bill rate is currently 5%, while the expected rate of return of the S&P 500 index is 10%. The standard deviation of portfolio A is 15% annually, while that of Bis 36%, and that of the index is 25%. Think about what are the appropriate performance measures to use in this question and why If you currently hold a market index portfolio, what would be the alpha for Portfolios A? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a decimal rounded to 3 decimal place.)

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