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Compute the sharp ratio of the combined risky portfolio.

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Reference no: EM13852780

Risk-Free Assets

Assets

Portfolio Allocation

Expected Rate of Return

Expected Standard Deviation

T-Bills

20

2.0%

0

Risky Assets

Bonds

60

5.0%

15

Stocks

20

14.0%

35

1)Assuming the correlation between stocks and bonds is 0.25, compute the Standard Deviation of the combined risky portfolio.

2)Compute the Sharp Ratio of the combined risky portfolio.

3) If you had $100,000 to invest in the portfolio based on the allocation above- including cash, compute the a) expected $ profit and b) expected WAHPR.

 

Reference no: EM13852780

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