Q1 Calculate the Sharpe ratio for Portfolio A to two decimal places and choose the correct response.

Q2 Assume Portfolio A and B lie on the efficient portfolio frontier, calculate the value of x to two decimal places and choose the correct response.

Q3 Assume Portfolio C is inefficient, what feasible value of y must this portfolio be less than?

Q4 Which of the following are NOT assumptions underpinning CAPM equilibrium conditions?

A Ability to borrow or lend at the risk free rate to specified amounts

B Frictionless markets

C Assets can be bought or sold at observed market prices

D Investors select their portfolios according to a mean variance objective

E Taxes are neutral

F Investors are price makers

G Investors use the same estimates of the expectations and variances of asset returns

Consider the following information provided in the table below: Expected return 10% Variance 2% X% 12% Portfolio A Portfolio B Portfolio C Risk free asset Y% 3% 5% Consider the following information provided in the table below: Expected return 10% Variance 2% X% 12% Portfolio A Portfolio B Portfolio C Risk free asset Y% 3% 5%