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QUESTION

Assume the following information for Morgan stock and Boris stock.

Assume the following information for Morgan stock and Boris stock.

  • Average return for Morgan stock = 13%
  • Average return for Boris stock = 15%
  • Average risk-free rate = 6%
  • Standard deviation for Morgan stock = 20%
  • Standard deviation for Boris stock = 25%
  • Beta of Morgan stock = 1.5
  • Beta of Boris stock = 2.5

The Sharpe index for Morgan stock is ________, and the Sharpe index for Boris stock is ________.

d. 0.45; 0.28 

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