Question: Question 1: 20 marks a) The following data are available relating to the performance of Mocho Stock and the market portfolio: 16% Mocho Average return

Question 1: 20 marks a) The following data are available relating to the performance of Mocho Stock and the market portfolio: 16% Mocho Average return Standard deviations of returns 26% 1.15 Residual standard deviation Market Portfolio 12% 22% 1.00 0% Beta The risk-free rate during the sample period was 4%. 1) Calculate Treynor's measure of performance for Mocho Stock ii) Calculate Sharpe's measure of performance for Mocho Stock. (5 marks) (5 marks) b) Briefly explain how do you rebalance your portfolio, (10 marks)

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