FINANCE- Assets Portfolio Allocation Expected Rate of Return Expected Standard Deviation

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.

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