Variance-Covariance matrix Stock H Stock I Stock Stock H 0.010 Stock I 0.003 0.090 Stock J 0.020 0.045 0.250 You form two portfolios. You form Portfolio A by investing $4,000 in Stock H and $6,000 in Stock I while you form Portfolio B by investing $7.000 in Stock I and $3.000 in Stock J. 3) Given the risk-free rate of 0.02, figure out the Sharpe ratio for Portfolios A and B. Which portfolio is better based on the Sharpe ratio? 2. Use the following information to answer the questions. Variance-Covariance matrix Stock H Stock 1 Stock J Stock H 0.010 Stock I 0.003 0.090 Stock J 0.020 0.045 0.250 You form two portfolios. You form Portfolio A by investing $4,000 in Stock H and $6.000 in Stock I while you form Portfolio B by investing $7,000 in Stock I and $3,000 in Stock J. 1) Given the expected returns of 0.04.0.06 and 0.08 for Stocks H. 1. and J respectively, Figure out the expected return for Portfolios A and B. (20points) Expecke rikeun y Portbollo A = (4000 / 19000 16000)) 0.04 + (6000/1000 Expected return of Patfolio B= +6000).06 - 5.2 (8000/(1000 + 3000). 206+(400/X00 +300)-0.02 2) Figure out the variance for Portfolios A and B. (30points) Varance of Pet Aforo A = Vox.2010 4607*10.095 +2.60% -60% 0.005) 4342 Variance & Patfolio B : 1507. -0,090 +1707.0.150+2.50%. ).-oo's ) - 14.982 3) Given the risk-free rate of 0.02, figure out the Sharpe ratio for Portfolios A and B. Which portfolio is better based on the Sharpe ratio? (20points)