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You proposed a portfolio for your client with 60% in stock A and 40% in stock...

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Finance

You proposed a portfolio for your client with 60% in stock A and40% in stock B. Stock A has an average weekly return of 0.88% andstock B has an average weekly return of 1.32%. Beta for stock A andB are 0.8 and 1.3 respectively. Now you want to deliver aperformance report to the client regarding portfolio performance ona weekly basis. (a). What’s the portfolio average weeklyreturn?

(b). What’s the portfolio beta?

(c). You have calculated the portfolio weekly standarddeviation: 3.9%. What’s the Sharpe ratio of the portfolio? Assumingweekly market return is 0.9% and weekly riskfree rate is 0.04%.

(d). Still assume the portfolio weekly standard deviation is3.9%, weekly market return is 0.9% and weekly risk-free rate is0.04%, what’s Jensen’s Alpha of the portfolio?

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