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

question 128

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 market (which is a 50-50 combination of the value and growth portfolios) portfolio is closest to:

• A).53
• B).58
• C).61
• D).79

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Definitions:

Fraternal Twins

Twins that develop from two different eggs fertilized by two different sperm, resulting in siblings that are genetically distinct.

Extraembryonic Membrane

Membranes forming outside the embryo that support its development, including the yolk sac, amnion, chorion, and allantois in vertebrates.

Keeps Embryo Moist

A function of the amniotic egg or other structures in various organisms to prevent desiccation of the embryo in a terrestrial environment.

Extraembryonic Membrane

Membranes that are not part of the embryo but are essential for the development of the embryo, including the amnion, chorion, yolk sac, and allantois.