You are evaluating various investment opportunities currently available and you have the fol- lowing information about five different well-diversified portfolios of risky assets. Interest rate rf = 3%.  (a) Calculate the Sharpe ratio for each portfolio.  (b) Explain which of these five portfolios is most likely to be the optimal risky portfolio (c) Suppose you are willing to invest with an expected return of 6%. What would be the investment proportions in the riskless asset and the optimal risky portfolio? What is the standard deviation of the return for this investment?

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Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.