1. Figure 1 reproduces John's notes on Pioneer Gypsum and Global Mining. Calculate the expected return,...

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1. Figure 1 reproduces John's notes on Pioneer Gypsum and Global Mining. Calculate the expected return, risk premium, and standard deviation of a portfolio invested partly in the market and partly in Pioneer. (You can calculate the necessary inputs from the betas and standard deviations given in the table. Try different portfolio combinations in steps of 1%.) Does adding Pioneer to the market benchmark improve the Sharpe ratio? How much should John invest in Pioneer and how much in the market? (Assume a market standard deviation of 16%.) Figure 1. John's notes on Pioneer Gypsum and Global Mining. Global Mining Expected return Standard deviation Beta Stock price Pioneer Gypsum 11.0% 32% 0.65 $87.50 12.9% 24% 1.22 $105.00 2. What should John do in the case of Global Mining? (Assume short sales are not allowed.) 1. Figure 1 reproduces John's notes on Pioneer Gypsum and Global Mining. Calculate the expected return, risk premium, and standard deviation of a portfolio invested partly in the market and partly in Pioneer. (You can calculate the necessary inputs from the betas and standard deviations given in the table. Try different portfolio combinations in steps of 1%.) Does adding Pioneer to the market benchmark improve the Sharpe ratio? How much should John invest in Pioneer and how much in the market? (Assume a market standard deviation of 16%.) Figure 1. John's notes on Pioneer Gypsum and Global Mining. Global Mining Expected return Standard deviation Beta Stock price Pioneer Gypsum 11.0% 32% 0.65 $87.50 12.9% 24% 1.22 $105.00 2. What should John do in the case of Global Mining? (Assume short sales are not allowed.)