Risk-Adjusted Return Measurements Assume the following information over a five-year period:
¦ Average risk-free rate ¼ 6%
¦ Average return for Crane stock ¼ 11%
¦ Average return for Load stock ¼ 14%
¦ Standard deviation of Crane stock returns ¼ 2%
¦ Standard deviation of Load stock returns ¼ 4%
¦ Beta of Crane stock ¼ 0.8
¦ Beta of Load stock ¼ 1.1
Determine which stock has higher risk-adjusted returns according to the Sharpe index. Which stock has higher risk-adjusted returns according to the Treynor index? Show your work.