Question 4 1. Do you observe any pattern regarding the Sharpe ratio of a stock and its average market cap (computed per PERMNO over the whole sample period)? Run a simple cross-sectional regression to check. A smaller market cap is associated with a higher Sharpe ratio, and this relation is statistically significant (i.e., t-statistic is below -2 or above 2) . A smaller market cap is associated with a higher Sharpe ratio, but this relation is not statistically significant ( i.e., t-statistic is between-2 and 2 )