Question $11$

Your client wants to create a portfolio of her favorite stocks and a risk$-$free asset. The stock portfolio has an E$($r$)$ of $8\%$ and $$ of $17\mathrm{.}6\%.$ The risk$-$free rate is $6\%.$

If you put $65\%$ of your client's money in herstock portfolio and $35\%$ in T$-$bills, what are $E(r)$ and $$ of the complete portfolio? $(6$ pts$)$

What is the Sharpe ratio of a $100\%$ investment in the risky portfolio? $(4$ pts $)$

What Sharpe ratio would you expect the complete portfolio to have? $(2$ pts$)$

Explain your answer to question $3.(2$ pts$)$