Given a Sharpe ratio for the market portfolio of 0.40, calcu…

Given a Sharpe ratio for the market portfolio of 0.40, calculate the expected return on a stock with a standard deviation of returns of 0.50 and a correlation with the market portfolio returns of 0.6. The risk-free rate is 5% and the standard deviation of the market portfolio returns is 0.25.

Shares of Lakewood, Inc. are currently selling for $52.63. Y…

Shares of Lakewood, Inc. are currently selling for $52.63. You believe the stock will decline in price ranging from $30 to $32 in the next few months. Which of the following strategies will allow you to profit if your prediction is correct?I.short the stockII.buy a call at 50III.write a call at 55IV.buy a put at 45