You are an investment consultant, and Bruno is your client who holds 200 shares of INV Ltd. Bruno has approached you, his consultant, to address the following concerns:

Required:

1. Suggest any two statistical measures he can use the assess the risk associated with his investment in the shares of INV Ltd. [2 points]
2. Why should he as an investor prefer risky investments with positive risk premiums? [2.5 points]
3. What is the Sharpe ratio, and what does a positive Sharpe ratio say about the performance of a risky investment? [2 points]