Question: Assume the Capital Allocation Pricing Model is true. The standard deviation of stock A is 12% and that the expected return is 11%. A has

Assume the Capital Allocation Pricing Model is true. The standard deviation of stock A is 12% and that the expected return is 11%. A has a beta of 2.5. The risk-free rate is 0%. The correlation between stock A and the market portfolio is 0.8. Calculate the Sharpe Ratio of the market portfolio.

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