Performance Metrics. Complete Problem 22 in the Questions and Problems section of Chapter 13 (shown below). When you pick the best choice for your portfolio, defend your decision in a 100 – 200 word essay.

You have been given the following return information for two mutual funds (Papa and Mama), the market index, and the risk-free rate.

 

Year

Papa Fund

Mama   Fund

Market

Risk-Free

 

2008

-12.6%

-22.6

-24.5%

1%

 

2009

25.4

18.5

19.5

3

 

2010

8.5

9.2

9.4

2

 

2011

15.5

8.5

7.6

4

 

2012

2.6

-1.2

-2.2

2

Calculate the Sharpe ratio, Treynor ratio, Jensen’s alpha, information ratio, and R-squared for both  funds  and determine which is the best choice for your portfolio.

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