If ebays stock has a volatility of 423 and an expected, Financial Management

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If ebays stock has a volatility of 423 and an expected

The Optima Mutual Fund has an expected return of 21.4 % and a volatility of 19.3 %. Optima claims that no other portfolio offers a higher Sharpe ratio. Suppose this claim is true, and the risk-free interest rate is 4.5 %.

a. What is Optima's Sharpe ratio?

b. If eBay's stock has a volatility of 42.3 % and an expected return of 11.6 %, what must be its correlation with the Optima Fund?

c. If the SubOptima Fund has a correlation of 82 % with the Optima Fund, what is the Sharpe ratio of the SubOptima Fund?

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Financial Management: If ebays stock has a volatility of 423 and an expected

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Financial Management: If ebays stock has a volatility of 423 and an expected

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