Question: Question: Consider the two (excess return) index model regression results for stock A and B. The risk free rate over the period was 6%, and
Question:Consider the two (excess return) index model regression results for stock A and B. The risk free rate over the period was 6%, and the market's average return was 14%. Performance is measured using an index model regression on excess returns. Calculate the following: A. Alpha B. Information ratio C. Sharpe Ratio D. Treynor measure Which stock is the best choice under the following circumstances? A. This the only risk asset to be held by the investor B. This stock will be mixed with the rest of investors portfolio, currently composed solely of holdings in the market index fund. C. This is one of many stock that the investor is analyzing to form an actively managed stock portfolio.
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