For all your questions, big or small, IDNLearn.com has the answers you need. Discover prompt and accurate answers from our community of experienced professionals.

The Sharpe ratio is a metric used to characterize trading strategies, and is defined to be its expected return over some interval divided by the standard deviation of returns over the same interval. Assume we have two trading strategies whose returns are independent, one with Sharpe ratio 4, and the other with Sharpe ratio 5. By allocating the portfolio optimally between the two strategies, what is the maximum Sharpe ratio we can achieve?