I have updated the Midterm Exam #2 Formula Sheet and uploaded the revised version on the course website. It is also listed here for your convenience. The update involves changes to the final item listed on this document, which explains the relationship between the Sharpe Ratio, an investor’s risk tolerance, and the volatility of an asset in determining the ideal proportion of the risk asset in a portfolio, whether for borrowing or lending purposes. This key concept from capital market theory is detailed towards the end of page 7 in my Portfolio and Capital Market Theory teaching note, a required reading for Finance 4335.
Midterm 2 Formula Sheet
Finance 4335