Answer:
Reward to Volatility Ratio = 31.50%
Explanation:
given data
expected risk premium = 12.6%
Treasury bills = 6.4%
invest = $75,000
solution
we know that Reward to Volatility Ratio is express as
Reward to Volatility Ratio = (Expected Portfolio Return - Risk Free Rate) ÷ Standard Deviation ........................1
so here Expected portfolio Return is
Expected portfolio Return = Risk Free Return + Risk Premium
Expected portfolio Return = 6.40% + 12.60%
Expected portfolio Return = 19%
so
Reward to Volatility Ratio =
Reward to Volatility Ratio =0.315
Reward to Volatility Ratio = 31.50%