Question

6. If two portfolios are well-diversified with a risk-free rate of 3.11% and the S&P market return for the past year has been 12.87%. Portfolio ABC has a return of 15.75% and has a beta of 1.4, while Portfolio XYZ returns 11.92% and has a beta of .85. Based on Jack Treynor's Model what are the Treynor Indexes for each stock, and assuming that the correlation of each the same, which stock would you add to your own portfolio based solely on the results of the Treynor Index? And what results would the Jensen Model provide and what would be your decision then?

Answer 1

Answer 1---- D. none of the above

Answer 2---- B. the project will delay by one day

Step-by-step explanation:

See attached image