A universe of securities includes a risky stock (S), a bond fund (B), and T-bills. The data are:

Security	Expected return	Standard deviation
S	13%	33%
B	6%	12%
T-bills	2%	0%

The correlation coefficient between S and B is -0.04.

Calculate the weights on S and B that create the optimal risky portfolio (call it O).

Calculate the expected return of O.

Calculate the standard deviation of O.

Calculate the Sharpe ratio of O.

Calculate the Sharpe ratio of S.

Calculate the Sharpe ratio of B.

Why is Sharpe ratio of O higher than that of S or B?

Suppose an investor places 1/2 of the complete portfolio in the risky portfolio O and the remainder in T-bills:

Calculate the complete portfolios expected return.

Calculate the complete portfolios standard deviation.

Calculate the complete portfolios Sharpe ratio.