A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 5%. The characteristics of the risky funds are as follows:

Stock Fund (S) Expected Return = 20% Standard Deviation= 40%

Bond Fund (B) Expected Return= 10% Standard Deviation=20%

The correlation between the fund returns is 0.15. What is the Sharpe ratio of the optimal risky portfolio?

0.4655

0.5345

0.2282

0.1466

0.4231

None of the above