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please type the answer by computer, so i can see it clearly, thank you!!!
You work as an investment analyst for a securities firm, and your boss has conducted a scenario analysis on the future performance of a stock fund and a bond fund:
Your boss wants to put together an ideal risky portfolio using the two funds described above, with a risk-free rate of 2.0 percent.
Question:
1(a) Calculate the weightings invested in each of the two funds, the expected returns and the standard deviation of the optimal risky portfolio.
1(b) Calculate the Sharpe ratio of the optimal risky portfolio.
Scenario Stock fund's return Bond fund's return Probability 0.35 Good 17% Normal 0.50 12% 11% 6% -1% Poor 0.15 -5%
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