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Now using combined portfolios: Stock 60%/ Bond 40% 9) Expected Return of a portfolio of: 60% Stock, 40% Bond 10) Standard Deviation of a portfolio

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Now using combined portfolios: Stock 60%/ Bond 40% 9) Expected Return of a portfolio of: 60% Stock, 40% Bond 10) Standard Deviation of a portfolio of: 60% Stock, 40% Bond 11) Sharpe Ratio of a portfolio of: 60% Stock, 40% Bond Stock 10%/ Bond 90% 12) Expected Return of a portfolio of: 10% Stock, 90% Bond 13) Standard Deviation of a portfolio of: 10% Stock, 90% Bond 14) Sharpe Ratio of a portfolio of: 10% Stock, 90% Bond Stocks 80% /Bonds 0% /Treasury Bills 20% 15) Expected Return of a portfolio of: 80% Stock, 0% Bond, 20% Treasury Bills 16) Standard Deviation of a portfolio of: 80% Stock, 0% Bond, 20% Treasury Bills 17) Sharpe Ratio of a portfolio of: 80% Stock. 0% Bond, 20% Treasury Bills Given the following information, answer the following questions: Expected Return on the stock market: 12%; Standard deviation of the stock market return 30% Expected Return on bond market: 6%; Standard deviation of the bond market return 10% Correlation between the Stock Market and the Bond Market = 0.2 Return on Treasury Bills: 3% Inflation: 4% Find the following: 1) Real expected return of the Stock Market 2) Real expected return of the Bond Market 3) Real return from Treasury Bills 4) Expected Risk Premium of the Stock Market 5) Expected Risk Premium of the Bond Market 6) Risk Premium of Treasury Bills 7) Sharpe Ratio of the Stock Market 8) Sharpe Ratio of the Bond Market Now using combined portfolios: Stock 60%/ Bond 40% 9) Expected Return of a portfolio of: 60% Stock, 40% Bond 10) Standard Deviation of a portfolio of: 60% Stock, 40% Bond 11) Sharpe Ratio of a portfolio of: 60% Stock, 40% Bond Stock 10%/ Bond 90% 12) Expected Return of a portfolio of: 10% Stock, 90% Bond 13) Standard Deviation of a portfolio of: 10% Stock, 90% Bond 14) Sharpe Ratio of a portfolio of: 10% Stock, 90% Bond Stocks 80% /Bonds 0% /Treasury Bills 20% 15) Expected Return of a portfolio of: 80% Stock, 0% Bond, 20% Treasury Bills 16) Standard Deviation of a portfolio of: 80% Stock, 0% Bond, 20% Treasury Bills a 17) Sharpe Ratio of a portfolio of: 80% Stock, 0% Bond, 20% Treasury Bills

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