You are chief investment officer at a pension fund invested in US equities, bonds, real estate and Canadian equities. Your portfolio has a sharpe ratio of 0.25. The investment committee is considering adding one or the other but not both of the following asset classes:

• Eurobonds with a predicted Sharpe ratio 0.10 and correlation with exisiting portfolio 0.42
• Australian equity index with a predicted Sharpe ratio = 0.30 and correlation with existing portfolio 0.67

Which asset should be added to the pension fund?

Group of answer choices

Eurobonds

Both

Neither

Australian Equity index