Question: Question 7 (a) A fundamental asset allocation problem is to determine the mix of risk free and risky assets for a portfolio. Explain why variation

Question 7 (a) A fundamental asset allocation problem is to determine

Question 7 (a) A fundamental asset allocation problem is to determine the mix of risk free and risky assets for a portfolio. Explain why variation in this mix over time by fund managers can introduce a bias when fund performance is evaluated using the Sharpe ratio. (7 marks)

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