Q18

The Expected Return E(r) for an investors Optimal Complete Portfolio is 10.4%. The Expected Return E(r) for the Optimal Risky Portfolio is 8.6%. The risk-free rate is 2%.

If the investors Risk Aversion Coefficient is 2, what is the Optimal Risky Portfolios Sharpe Ratio?

Select one:

a. 0.41

b. 0.49

c. 0.19

d. 0.30

e. None of the above