You have been given the following return information for a mutual fund, the market index, and...

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Finance

You have been given the following return information for amutual fund, the market index, and the risk-free rate. You alsoknow that the return correlation between the fund and the market is0.87.
Year Fund Market Risk-Free
2011 –18.20 % –35.50 % 2 %
2012 25.10 20.60 5
2013 13.50 12.70 2
2014 6.80 8.40 6
2015 –1.86 –4.20 3
Calculate Jensen’s alpha for the fund, as well as itsinformation ratio. (Do not round intermediate calculations.Enter the alpha as a percent rounded to 2 decimal places. Round theratio to 4 decimal places.)

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Jensens Alpha Actual return expected return Actual returns are provided Expected return is calculated using CAPM as riskfree rate betamarket return riskfree rate Beta correlation See Answer

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You have been given the following return information for amutual fund, the market index, and the risk-free rate. You alsoknow that the return correlation between the fund and the market is0.87.YearFundMarketRisk-Free2011–18.20%–35.50%2%201225.1020.605201313.5012.70220146.808.4062015–1.86–4.203Calculate Jensen’s alpha for the fund, as well as itsinformation ratio. (Do not round intermediate calculations.Enter the alpha as a percent rounded to 2 decimal places. Round theratio to 4 decimal places.)

Year	Fund		Market		Risk-Free
2011	–18.20	%	–35.50	%	2	%
2012	25.10		20.60		5
2013	13.50		12.70		2
2014	6.80		8.40		6
2015	–1.86		–4.20		3