assume that we have only two following risk assets (stock 1&2) in the market.

stock 1 - E(r) = 20%, std 20%

stock 2- E(r) = 10%, std 20%

the correlation coefficient between stock 1 and 2 is 0. and the risk-free asset is 5%. In the equilibrium, the market capitalization of stock 1 and 2 are %3million and $1 million respectably...

Q. other thins being equal, describe what happens to the above sharpe ratio (increases or decreases) if the risk-free asset is 6% (increase by 1%)? explain graphically (use mean-variance plane)