Question: 1. Over a recent three-year period, the average annual return on a portfolio was 25 percent and the annual return standard deviation for the portfolio

1. Over a recent three-year period, the average annual return on a portfolio was 25 percent and the annual return standard deviation for the portfolio was 20 percent. During the same period, the average return on 90-day Treasury bill (risk free rate) was 5 percent. What is the Sharpe ratio for this portfolio during this three-year period? (i) What is a Sharpe-optimal portfolio? (111) Among the many Markowitz efficient portfolios, which one is Sharpe optimal? (iv) Suppose the Sharpe ratio for Portfolio A is 4.5 and for Portfolio B is 3.5, which portfolio an investor will prefer to choose? Why

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