1. The? Sharpe's measure for Jane? Smith's investment portfolio is? 0.40, while the? Sharpe's measure for the market is 0.30. This information suggests that? Smith's portfolio

A. is overly? diversified, and some securities should be sold to bring the portfolio in line with the market.

B. exhibits superior performance because its risk premium per unit of risk is above that of the market.

C. exhibits poor performance because its risk premium per unit of risk is below that of the market.

D. is inadequately? diversified, and more securities should be added to the portfolio in order to bring it in line with the market.

2. The hedge ratio of an at-the-money call option on IBM is 0.19. The hedge ratio of an at-the-money put option is −0.52. What is the hedge ratio of an at-the-money straddle position on IBM? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Hedge ratio