1. You invest 50% in a risky portfolio, and 50% in a treasury bill. The risky portfolio has an expected return of 15% and a standard deviation of 25%. The treasury bill pays 7%. Suppose that your risky portfolio includes the following investments in the given proportions:

Stock A 30%

Stock B 30%

Stock C 30%

Stock D 10%

3. (5) What is the Sharpe ratio of the risky portfolio? What is the Sharpe ratio of the complete portfolio?

4. (5) Instead of investing 50% in the risky portfolio, you now decide to invest in the risky portfolio a proportion (y) of your total investment budget so that your complete portfolio will have an expected return of 12%. What is the proportion of y?