FIN 402 MASTER 1 Predictable World / fin402master.com FIN 402 MASTER 1 Predictable World / fin402master. | Page 24

Evaluate this return relative to its current income and capital gain
components. d. Use the HPR calculated in question c to compute
Jensen’s measure (Jensen’s alpha). Use that measure to analyze the
performance of the Stalchecks’s portfolio on a risk-adjusted, market-
adjusted basis. Comment on your finding. Is it reasonable to use
Jensen’s measure to evaluate a four-investment portfolio? Why or
why not? e.
On the basis of your analysis in questions a, c, and d,
what, if any, recommendations might you offer the Stalchecks relative
to the revision of their portfolio? Explain your recommendations.
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FIN 402 Week 2 DQ 1
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What are different ratio categories? Which category is most
important to bondholders? Why? Which category is most important
to stockholders? Why?
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FIN 402 Week 2 DQ 2
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What are liquidity ratios? Why are they important? How may an
investor use liquidity ratios when making investment decisions?