Question: The question is complete, has all the data. Thanks Q2 You want to evaluate the stocks X and Y using the data in the table

The question is complete, has all the data. Thanks

Q2 You want to evaluate the stocks X and Y using the data in the table below. The risk-free rate, If, is 3%. Asset E(r) B X 16% 1.2 40% Y 9% 0.9 30% M 12% 1 20% a. Suppose you're planning let either X or Y constitute your entire risky investment. Which would you choose and why? b. Suppose you're planning to add a small amount of either X or Y to your well-diversified portfolio. Which would you choose and why? c. Suppose you're planning to use either X or Y to exploit mispricing in the market. Which would you choose and why? d. What is the M2 measure for the two stocks? Now form a new portfolio, Z, by taking a leveraged position in asset X. Specifically, invest 150% of your wealth in asset X and finance it with an appropriate short position in the risk-free asset. f. What is the a of asset Z? g. What is the information ratio of asset Z

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