Chee? Chew's portfolio has a beta of 1.23 and earned a return of13.8% during the year just ended. The? risk-free rate is currently4.7%. The return on the market portfolio during the year just endedwas 11.2%.
a. Calculate? Jensen's measure? (Jensen'salpha) for? Chee's portfolio for the year just ended.
b. Compare the performance of? Chee's portfoliofound in part a to that of Carri? Uhl's portfolio,which has a? Jensen's measure of negative - 0.18 Which portfolioperformed? better? Explain.
c. Use your findings in part ato discuss the performance of? Chee's portfolio during the periodjust ended.
a.The? Jensen's measure? (Jensen's alpha) for? Chee's portfoliois ___. ?(Round to two decimal? places.)
? b. Chee's portfolio, with a JM of ____
?
1.11
-0.18
outperformed? Carri's portfolio, with a JM of
negative ?0.18. A_________
?
positive
negative
JM indicates that the _____
?
actual
required
return exceeds the ____
?
actual
required
return. A ____
?
positive
negative
return on a portfolio means that it did not earn its ____
?
actual
required
return.?(Select from the? drop-down menus.)
c. Use your findings in part ato discuss the performance of? Chee's portfolio during the periodjust ended.???(Select the best answer? below).
A. Based on its positive JM?, Chee's portfolio hasperformed Worse than the market.
B. Based on its negative JM?, Chee's portfolio hasperformed better than the market.
C. Based on its positive JM?, Chee's portfolio hasperformed better than the market
D. Based on its negative JM?, Chee's portfolio hasperformed worse than the market.
