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Consider the following information about the expected return and volatility of Microsoft and Walmart Stock: Expected Return Microsoft: 1 0 % Volatility Microsoft: 2 0
Consider the following information about the expected return and volatility of Microsoft and Walmart Stock:
Expected Return Microsoft:
Volatility Microsoft:
Expected Return Walmart:
Volatility Walmart:
Correlation between Microsoft and Walmart:
Risk Free Rate:
a pts What is the volatility of an equally weighted portfolio of Microsoft and Walmart.
b pts What is the Sharpe Ratio of an equally weighted portfolio of Microsoft and Walmart.
c pts In one or two sentences, explain why the Sharpe Ratio of an equally weighted portfolio of Microsoft and Walmart is greater than the Sharpe Ratio of Microsoft alone.
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