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You are given the expected return and volatility and correlation of stock and bond. bond stock Risk free rate Expected return 3% 8% 2% Standard

You are given the expected return and volatility and correlation of stock and bond. bond stock Risk free rate Expected return 3% 8% 2% Standard deviation 7% 16% correlation between stock and bond 0.3 You have $100,000 to invest, and your risk aversion parameter A = 5. What is the Sharpe ratio of the tangency portfolio? A. 0.376 B. 0.386 C. 0.396 D. 0.406 How much do you invest in the stock? Answer: $ (round answer to nearest dollar)

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