... 17 .39 in 17 .37 and 17 .38 we obtain2 3 =1 3 h1+1 3 (h1+ h2), (17.40) and 2 3 =1 3 (h1+ h2) +1 3 h2. (17.41)The solution is h1= h2= 2 /3 which giveske=2 3 ,4 3 ,2 3 . ... is h1= 2 /3, h2= 5 /3, which giveskq=2 3 ,7 3 ,5 3 . (17. 53) ✷NotesComprehensive treatments of the theory of Hilbert spaces can be found in Luenberger [5], Dudley [3] , and Young ... (1, 1/2, 3/ 2) and its standard deviation isσ(kq) =1√6. (18 .33 )The risk-free return ¯r equals 1 and the Sharpe ratios of returns r1 and r2areE(r1) −1σ(r1)= 0, (18 .34 ) and E(r2)...