Question: Problems 16- 18 are based on the following provided in the following table (25 points): Assets Portfolio Allocation Expected Expected Rate of Return Standard Deviation

Problems 16- 18 are based on the following provided in the

following table (25 points): Assets Portfolio Allocation Expected Expected Rate of Return

Problems 16- 18 are based on the following provided in the following table (25 points): Assets Portfolio Allocation Expected Expected Rate of Return Standard Deviation Risk-Free Assets T-Bills 10.0 2.0% 0% Risky Assets Bonds Stocks 60.0 01 40 5.5% 60 7 30.0 24.0% 1% 12% 42% 16. Assuming the correlation between stocks and bonds is 0.25, compute the Standard Deviation of the combined risky portfolio. 10.89 1 207 36 + 2 17. Compute the Sharpe Ratio of the combined risky portfolio. 18. If you had $100,000 to invest in this portfolio based on the allocation above - including cash, compute the expected $ profit and expected WAHPR. 6

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