Finance Optimization | 7/1/19 10:41 AM FNCE 2010-110: Fndmnts of Financial Analysis Nolan Glubke Homework: Finance Optimization Save Score: 0 of 1 pt HW Score: 0%, 0 of 7 pts 3 of 7 (0 complete) Instructor-created question Question Help Rp-R The Sharpe ratio is a measure that allows one compare two portfolios. It is given by where Rp the expected return on the portfolio, RE is the risk-free rate and op the standard deviation of the portfolio returns. A larger Sharpe ratio is often considered a marker of a better portfolio. For example, if two portfolios have the same return then the one with the smaller standard deviation will have a larger Sharpe ratio. Altematively, if two portfolios have the same standard deviation then the one with the larger return will have a larger Sharpe ratio You are an investor and own a portfolio consisting of stocks. The percentage of the portfolio that is invested in the first stock is 88% and the percentage of the portfolio that invested in the second stock is 12%. 7.32% and the expected return for the second stock is 6.11% . The risk-free rate is 1.01%, the expected return for the first stock The standard deviation of the first stock is 13.67% and the standard deviation of the second stock 17.11%. The correlation between the stocks is 54.00%. What is the expected return on the portfolio? Write as a percentage to two decimal places%. four decimal places What is the variance of the portfolio? Write the answer as a number % What is the standard deviation of the portfolio. Write the answer a a percentage to two decimal places Enter your answer in the edit fields and then click Check Answer. ? All parts showing Check Answer Clear All