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Chapter 11 Problems: prob. 1-5, pages 291. Risk-Adjusted Return Measurements Assume the following information over a five-year period:
Chapter 11 Problems: prob. 1-5, pages 291.1. Risk-Adjusted Return Measurements Assume the following information over a five-year period:• Average risk-free rate = 6%• Average return for Crane stock = 11%• Average return for Load stock = 14%• Standard deviation of Crane stock returns = 2%• Standard deviation of Load stock returns = 4%• Beta of Crane stock = 0.8• Beta of Load stock = 1.1Determine which stock has higher risk-adjusted returns when using the Sharpe index. Which stock has higher risk-adjusted returns when using the Treynor index?Show your work.
