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Digiron [165]
3 years ago
11

A portfolio with a 20% standard deviation generated a return of 10% last year when T-bills were paying 5.0%. This portfolio had

a Sharpe ratio of ____. A. 0.45 B. 0.20 C. 0.25 D. 0.15
Business
1 answer:
Maslowich3 years ago
6 0

Answer:

0.25

Explanation:

A portfolio has a standard deviation of 20%

The portfolio also generated a return of 10%

T-bills were paying 5%

Therefore, Sharpe ratio of the portfolio can be calculated as follows

Sharpe ratio= 10-5.0/20

= 5/20

= 0.25

Hence the Sharpe ratio of the portfolio is 0.25

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