Sharpe-ratio Question 1 (2 marks) Use the following table to answer the questions a-c below. Risky Expected return on Standard Risk-free Portfolio risky portfolio deviation of risky return portfolio 1 8 1.5 4 2 9 1.75 4 3 10 2 4 11 2.25 4 4 a. Calculate the Sharpe ratio for each portfolio b. Identify the optimal portfolio from the above 4 Question 2 (3 marks) Suppose all investors use the market perceptions of risk and expected return and are thus using the same set of efficient portfolios. a. Draw the efficient set of portfolios and the CML for the optimal portfolio. efficient set b. Explain why all investors should choose the same risky portfolio from the efficient set c. Identify on the CML two investors; one who is risk averse and one who is not