(PLEASE SHOW ALL CALCULATION, NO EXCEL

FUNCTIONS)

You have two stock portfolios with betas of 1.10 (portfolio X) and 1.60 (portfolio Y ). Additionally, you know that portfolio X (portfolio Y ) has had an average return over the past 20 years of 9.54%(13.24%) and a standard deviation of 28.33% (37.65\%). Assume the market risk premium is 6.8% and the risk-free rate is 4.4% a. What is the expected return on portfolio X ? b. What is the Sharpe ratio of portfolio Y ? c. The Sharpe ratio for portfolio X is lower than the Sharpe ratio for portfolio Y. Why does this suggest that investors prefer portfolio Y to portfolio X ? d. If you wanted a portfolio that is a combination of portfolios X and Y to have an expected return of 13.25%, what would be that portfolio's beta