The expected return of stock S is 0.07, the expected return…

The expected return of stock S is 0.07, the expected return of stock B is 0.08, and the risk-free rate is 0.02.  The var-cov matrix of S and B:             |       S               B             S |     0.2                            B |     0.06         0.3 a.  Calculate the Sharpe ratio of MVP.  b.  Calculate the Sharpe ratio of optimal risky portfolio O.  c.  An investor invested $8,500 of the complete portfolio in the optimal risky portfolio O and $1,500 in T-bills.  Calculate the Sharpe ratio of this complete portfolio.

Given the following returns: Year      Stock X      Market i…

Given the following returns: Year      Stock X      Market index    1          -0.36            -0.29    2          -0.25             0.41    3          -0.14             0.09    a.  Calculate the beta of stock X.  b.  Calculate the alpha of stock X.  c.  Calculate the error terms of stock X.  d.  Calculate the systematic risk of stock X.  e.  Calculate the unsystematic risk of stock X.  f.  Is stock X a good stock to consider for inclusion in a portfolio?  Explain.  g.  Write out the var-cov matrix of stock X and market index.