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Sample Problem Given: Rf (constant) 4.00% Year 1 Year 2 Year 3 Year 4 Asset I 13.00% 6.25% 3.50% -6.75% Asset J - 14.00% 18.50%

Sample Problem Given: Rf (constant) 4.00% Year 1 Year 2 Year 3 Year 4 Asset I 13.00% 6.25% 3.50% -6.75% Asset J - 14.00% 18.50% 27.50% 8.00% Asset M 26.00% -12.25% 7.00% 11.25% 1) Which portfolio would have a higher Sharpe ratio, assuming that you weighted both portfolios to return 7%? a) A portfolio of Assets I and J b) A portfolio of Assets M and Rf

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