Form an equally weighted portfolio of large and small stocks and compute the Reward-to-Risk Ratio (the slope of the Security Market Line).

		Annual returns in percent:
Year	Large Company Stocks	Small Company Stocks	S&P500 Index	Treasury Bills
1994	1.32	-3.34	-2.32	4.39
1995	37.58	33.21	13.73	5.61
1996	22.96	16.50	46.94	5.14
1997	33.36	22.36	24.69	5.19
1998	28.58	-2.55	30.54	4.86
1999	21.04	21.26	8.97	4.80
2000	-9.10	-3.02	-2.04	5.98
2001	-11.89	-1.03	-17.26	3.33
2002	-22.10	-21.58	-24.29	1.61
2003	28.89	47.25	32.19	0.94
2004	10.88	18.33	4.43	1.14
2005	4.91	4.55	8.36	2.79
2006	15.79	18.29	12.36	4.97
2007	5.49	7.42	-4.15	4.52
2008	-37.00	-40.54	-38.47	1.24
2009	26.46	43.89	23.49	0.15
2010	15.06	16.91	12.64	0.14
2011	5.53	-1.80	0.00	0.03
2012	7.26	15.91	13.29	0.05
2013	26.50	38.32	29.60	0.07

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Solution Step 1 EXPECTED RETURNSPERCENT SUM OF RETURNS OF LARGE COMPANY21152 Number of Years20 Expec... View the full answer