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A portfolio manager summarizes the input from the macro and micro forecasters in the following table: Stock A Stock & Stock Stock 0 Micro Forecasts

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A portfolio manager summarizes the input from the macro and micro forecasters in the following table: Stock A Stock & Stock Stock 0 Micro Forecasts Expected Return (X) Beta 1.5 20 2.1 18 1.3 14 1.4 Residual Standard Deviation (%) 50 59 56 Asset T-bills Passive equity portfolio Macro Forecasts Expected Return (8) 11 16 Standard Deviation (X) 0 Calculate the following for a portfolio manager who is not allowed to short sell securities. The manager's Sharpe ratio is 0 2473. o. What is the cost of the restriction in terms of Sharpe's measure? (Do not round intermediate calculations, Enter your answer os decimals rounded to 4 places) Cool of restriction b. What is the utility loss to the investor (A = 3.5) given his new complete portfolio? (Do not round intermediate calculation. Round your answers to 2 decimal places) Cases Unconstrained Constrained Passive Utility Levels % % A portfolio manager summarizes the input from the macro and micro forecasters in the following table: Stock A Stock & Stock Stock 0 Micro Forecasts Expected Return (X) Beta 1.5 20 2.1 18 1.3 14 1.4 Residual Standard Deviation (%) 50 59 56 Asset T-bills Passive equity portfolio Macro Forecasts Expected Return (8) 11 16 Standard Deviation (X) 0 Calculate the following for a portfolio manager who is not allowed to short sell securities. The manager's Sharpe ratio is 0 2473. o. What is the cost of the restriction in terms of Sharpe's measure? (Do not round intermediate calculations, Enter your answer os decimals rounded to 4 places) Cool of restriction b. What is the utility loss to the investor (A = 3.5) given his new complete portfolio? (Do not round intermediate calculation. Round your answers to 2 decimal places) Cases Unconstrained Constrained Passive Utility Levels % %

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