Use the Following Information to Answer the Question(s)below

question 113

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock appearing in only one portfolio) : growth stocks and value stocks.Assume that these two portfolios are equal in size (market value) ,the correlation of their returns is equal to 0.6,and the portfolios have the following characteristics: The risk-free rate is 3.5%.
-The Sharpe ratio for the value stock portfolio is closest to:

• A).53.
• B).58.
• C).61.
• D).79.

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Definitions:

Positively Reinforced

A behavior that increases in frequency or likelihood as a result of being followed by a rewarding stimulus, according to principles of operant conditioning.

Conditioned Avoidance Response

Behavior that is reinforced because it allows individuals to avoid situations that cause anxiety.

Unconditioned Response

A natural, unlearned reaction to an unconditioned stimulus.

Continuous Reinforcement Schedule

A reinforcement strategy in which every instance of a desired behavior is reinforced, leading to quicker learning of the behavior.