Suppose there are a risky portfolio and a risk$-$free asset.

Risky portfolio has an expected return of $20\%$ and standard deviation of $30\%.$

Risk free asset has an expected return of $4\%($and of course standard deviation of $0\%-$ i$.$e$.,$ risk free$).$

What is the Sharpe Ratio? What is the expected return if you want to take $20\%$ risk $($i$.$e$.,$ standard deviation $=20\%).$

Hint: Drawing Capital Allocation Line $($CAL$)$ may help.

Sharpe $=0\mathrm{.}53$ and $E[r]=13\mathrm{.}33\%$

Sharpe $=0\mathrm{.}35$ and $E[r]=13\mathrm{.}33\%$

Sharpe $=0\mathrm{.}35$ and $E[r]=14\mathrm{.}67\%$

Sharpe $=0\mathrm{.}53$ and $E[r]=14\mathrm{.}67\%$