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Are the following statements true or false? Explain your reasoning. A higher allocation to the risky portfolio increases the Sharpe ratio. With a constant risk
Are the following statements true or false? Explain your reasoning.
- A higher allocation to the risky portfolio increases the Sharpe ratio.
- With a constant risk premium, a higher risk-free rate will decrease the Sharpe ratio of investments that hold a portion of the risky portfolio.
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