( in the first questions of the exercise, it is asked to calculate the expected excess return on stock a and b, the alpha for a and b and the residual variance on stock a and b: I do not know if it will be usefull to answer this part)

Suppose that the portfolio manager follows the Treynor-Black model, and constructs an active portfolio (p) that consists of the above two stocks. The alpha of the active portfolio (p) is -18%, and its residual standard deviation is 150%. What is the Sharpe ratio for the optimal portfolio (consisting of the passive equity portfolio and the active portfolio (p))?

How much of the Sharpe ratio is contributed by the active portfolio?

Whats the M² of the optimal portfolio?

Enter your response as a decimal number rounded to four decimal places.

A portfolio manager summarizes the input from the macro and micro forecasts in the following table Micro Forecasts Expected Return (%) | Beta | Residual Standard Deviation (%) Asset Stock A 18 Stock B 16 Macro Forecasts Expected Return (%) 1 Standard Deviation (% ) Asset T-bills Passive Equity Portfolio (m) 14