You are planning to buy $10,000 worth of IBM and $30,000 worth of Apple stock. According to an analyst, the expected returns for next year are 7% for IBM and 10% for Apple, with a standard deviation of 16% for IBM and 30% for Apple. The risk-free rate is 4%. The correlation between the two stocks' returns is 0.42.

1. What is IBM's Sharpe Ratio? Round to two decimal places.

2. What is Apple's Sharpe Ratio? Round to two decimal places.

Answer rating: 100% (QA)

IBMs Sharpe Ratio The Sharpe ratio measures the excess return p... View the full answer