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Suppose I'm given two assets, $x_0$, $x_1$ and the stochastic discount factor m. How do I find $m_p$, then use it to compute Sharpe($R_p$)?

Any help is greatly appreciated.

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  • $\begingroup$ Isn't this a text-book thing? $\endgroup$ – SmallChess Mar 19 '15 at 22:57
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    $\begingroup$ Please use latex and explain the difference between $m$ and $m_p$ and if you have assets $x_0$ and $x_1$ (prices? returns?) how does $R_p$ relate to that? $\endgroup$ – Richard Mar 20 '15 at 7:34

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