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:

Flat

Lacking in vivacity or interest; without marked variation in emotional or dynamic level.

Blunted

Lacking in force, intensity, or sharpness; often used to describe diminished emotional responses or reactions.

Exaggerated

Describes something that is represented as greater than is true or reasonable; overstated or embellished.

Establish Trust

Establishing trust involves creating a reliable, dependable, and safe environment or relationship where confidence in one another can be built.