Berkshire Hathaway, the investment company run by Warren Buffet, has been one of the most successful US stocks over the past 40 years. For questions 1 through 9, please refer to the following quotes from "Buffet's Alpha" by Andrea Frazzini, David Kabiller, and Lasse Heje Pedersen, which summarizes Berkshire Hathaway's impressive performance. "Buffet's track record is clearly outstanding. A dollar invested in Berkshire Hathaway in November 1976 would have been worth more than $1500 at the end of 2011. Over this period, Berkshire realized an average annual return of 19.0% in excess of the T-Bill rate, significantly outperforming the general stock market's average excess return of 6.1% Berkshire stock also entailed more risk, realizing a volatility of 24.9% [per year], higher than the [annual market volatility of 15.8% To put Buffet's performance in perspective, we compare Berkshire's Sharpe ratio to those of all other U.S. common stocks Buffet is in the top 3% among all mutual funds and the top 7% among all stocks. Among stocks with at least a 30-year history from 1926-2011, Berkshire has realized the highest Sharpe ratio. If you could travel back in time and pick one stock in 1976, Berkshire would be your pick." 1. Using the information above, calculate the Sharpe ratio on Berkshire Hathaway 2. Using the information above, calculate the Sharpe ratio on the market portfolio