Question 5 of 6 The Sharpe ratio is a metric used to characterize trading...

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Finance

Question 5 of 6
The Sharpe ratio is a metric used to characterize trading
strategies, and is defined to be its expected return over some
interval divided by the standard deviation of returns over the same
interval. Assume we have two trading strategies whose returns
are independent, one with Sharpe ratio 4, and the other with
Sharpe ratio 5. By allocating the portfolio optimally between the
two strategies, what is the maximum Sharpe ratio we can
achieve? Round your number to 3 decimal places.
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