Suppose you manage an equity fund with the following securities. Use the following data to calculate the information ratio of each stock.                           Input Data Vogt Industries Isher Corporation Hedrock, Incorporated       Alpha 0.012 0.006 0.016       Beta 0.277 1.015 1.630       Standard Deviation 0.156 0.168 0.181       Residual Standard Deviation 0.117 0.048 0.113                     Required:             Using the information in the table above, please calculate the information ratio for each stock.

Vinay

As an active fund manager, you have obtained information on three individual stocks, the market index, and T-bills as follows: Expected Return (%) Asset Stock 1 Stock 2 Stock 3 Market Index T-bills 20.0 16.0 6.0 10.0 4.0 Total Standard Deviation (%) 80.00 60.00 50.00 40.00 0.00 Beta 1.8 1.4 0.8 1.0 0.0 You decide to use the above information to form an optimal active portfolio, consisting of the three individual stocks. Determine the corresponding weights for the three stocks in the optimal active portfolio. Show your work.

The FTSE 100 Index is an example of a benchmark for measuring the performance of an Equity fund. What is the role of a benchmark in measuring performance of a fund? Give an example of a Bonds Benchmark.

Given the following information on five stocks, construct: a. A simple price-weighted average b. A value-weighted average c. A geometric average d. What is the percentage increase in each average if the stock prices change to those in Column I? e. What is the percentage increase in each average if the stock prices change from those in the Price column to those in Column II? f. Why were the percentage changes different in parts (d) and (e)? g. If you were managing a fund and wanted a source to compare your results to, which of the three averages would you prefer to use, and why? Stock Price # of Shares I II A B C D E F $12.00 150,000 $14.00 125,000 $11.00 200,000 $ 22.00 80,000 $8.00 30,000 $29.00 140,000 $12.00 $12.00 $14.00 $14.00 $20.00 $11.00 $ 22,00 $ 22.00 $8.00 $15.00 $29.00 $29.00

Given a simple world with two assets, a bond fund and a stock fund, clearly detail the steps involved in arriving at the 1) efficient frontier, and 2) market (optimal) portfolio.

After learning the course, you divide your portfolio into three equal parts (i.e., equal market value weights), with one part in Treasury bills, one part in a market index, and one part in a mutual fund with beta of 1.11. What is the beta of your overall portfolio?

An analyst develops the following covariance matrix of returns: Hedge Fund Hedge Fund Market Index 0.0289 0.00765 Market Index 0.00765 0.0225 Calculate the correlation of returns between the hedge fund and the market index.

Review the table below listing performance metrics for selected assets. The metrics are defined in the same way as in CAPM. Compute the CAPM alpha for the four assets (data attached as image).

What is the beta of a portfolio comprised of the following securities? Stock Amount Invested Security Beta- 0.86 1.76 1.35 A B C $3600 $ 2800 $ 9000 Beta of portfolio to 2 decimal places is Numeric Response