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Solve problem related to the chee chew portfolio

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Question: Chee Chew's portfolio has a beta of 1.3 and earned a return of 12.9% during the year just ended. The risk-free rate is currently 4.2%. The return on the market portfolio during the year just ended was 11.0%.

a. Calculate Jensen's measure (Jensen's alpha) for Chee's portfolio for the year just ended.

b. Compare the performance of Chee's portfolio found in part a to that of Carri Uhl's portfolio, which has a Jensen's measure of -0.24. Which portfolio performed better? Explain.

c. Use your findings in part a to discuss the performance of Chee's portfolio during the period just ended.

Reference no: EM131627198

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