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How can I prove that the return criteria for adding an investment A to an existing portfolio can be represented as the below inequality using the Sharpe Ratio Approach for risk adjusted returns as applied to portfolio decision making?enter image description here

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  • $\begingroup$ The Sharpe Ratio condition for the new portfolio (with A) to be better than the old (without A) is $SR_p^{new} \ge SR_p^{old}$. From this we should be able to derive the above. The only probem is that I don't know what $\alpha$ is, how is it defined ? $\endgroup$
    – noob2
    Apr 5 at 3:40

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