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Suppose you have a project that has a 0.6 chance of doubling your investment in a year and a 0.4 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 places.) Standard deviation Suppose that you have $1 million and the following two opportunities from which to construct a portfolio: a. Risk-free asset earning 8% per year. b. Risky asset with expected return of 32% per year and standard deviation of 39%. If you construct a portfolio with a standard deviation of 33%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Expected return on portfolio Greta, an elderly investor, has a degree of risk aversion of A= 5 when applied to return on wealth over a one-year horizon. She is pondering two portfolios, the S&P 500 and a hedge fund, as well as a number of 5-year strategies. (All rates are annual, continuously compounded.) The S&P 500 risk premium is estimated at 7% per year, with a SD of 19%. The hedge fund risk premium is estimated at 11% with a SD of 38%. The return on each of these portfolios in any year is uncorrelated with its return or the return of any other portfolio in any other year. The hedge fund management claims the correlation coefficient between the annual returns on the S&P 500 and the hedge fund in the same year is zero, but Greta believes this is far from certain. Compute the estimated 1-year risk premiums, SDs, and Sharpe ratios for the two portfolios. (Do not round your intermediate calculations. Round "Sharpe ratios" to 4 decimal places and other answers to 2 decimal places.) S&P Portfolio Hedge Fund Portfolio Risk premiums SDs Sharpe ratios