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.