Ben has a risky portfolio that is 66.2% invested in a stock portfolio X, with an expected return of 11.5%

and standard deviation of 25.0%. The other 33.8% of Bens risky portfolio is invested in a bond portfolio Y

that has an expected return of 5.0% and standard deviation of 12.0%. The correlation between the stock

portfolio and bond portfolio is -0.1. Bens risky portfolio is THE optimal risky portfolio; he has a risk

aversion parameter of A=1.5. The risk-free rate is 4.5%. 5 pts

a. What is the Sharpe ratio of Bens stock portfolio X?

b. Compute the expected return and standard deviation of Bens optimal complete portfolio.

c. Bens complete portfolio is valued at $1,350,000. What are the weights of his complete portfolio in

the stock portfolio X, the bond portfolio Y, and the risk-free asset?