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You have two assets in your portfolio. the risk free asset offering a return of 3% and the risky asset offering a risk premium of 5%. You invest 60% of your portfolio in the risk free asset, what is the return on your portfolio. Assuming a standard deviation on the risky asset is 122%, what is the sharpe ratio of this portfolio? Will the Sharpe ratio change as your weightings change?

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Financial Management, Finance

Category:- Financial Management
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