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Suppose that you have identified two stocks with risk and return properties as described in...

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Finance

Suppose that you have identified two stocks with risk and return properties as described in the table below:

Expected Return

E(Ri)

Variance

i 2

Standard Deviation

i

Correlation

1,2

Stock 1

10%

0.01

10%

+1

Stock 2

20%

0.09

30%

If you invest a quarter of your money in Stock 1 and three quarters in Stock 2, what will be the Sharpe ratio of this two-stock portfolio of yours? Risk-free rate is 5%.

Round your answer to the nearest 0.1, i.e., one decimal place.

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