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serious [3.7K]
2 years ago
13

Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 7 percent and 4 percent, r

espectively. Assumr risk free rate of 2%.
a) Estimate the Sharpe ratio of each mutual fund
b) According to the Sharpe ratio, which fund performed better?
Business
1 answer:
ElenaW [278]2 years ago
5 0

Answer:

a) 0.9 & 1

b) Mutual Fund B

Explanation:

For starters, I will define what Sharpe ratio is.....

Sharpe ratio is tagged, the measure of risk-adjusted return of a financial portfolio. It is worthy if note that on the average, a portfolio with a higher Sharpe ratio is considered superior relative to its peers.

You the question, the Sharpe ratios would be calculated as follows:

(Return of portfolio - risk free rate) / standard deviation.

So, for Mutual Fund A:

A = (12% - 3%) / 10%

A = 9% / 10%

A = 0.9

For Mutual Fund B:

B = (10% - 3%) / 7%

B = 7% / 7 %

B = 1

Although the Mutual Fund in A is calculated to have a higher return, the Mutual Fund B is laced with a higher risk-adjusted return.

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Answer:

1. Qatar

2. Macao SAR

3. Luxembourg

Explanation:

The 3 wealthiest countries in the world according to GDP (PPP) is Qatar - $134,623, Macao SAR - $122,201 and  Luxembourg - $108,813

5 0
3 years ago
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant,
Naddika [18.5K]

Answer:

$380

Explanation:

Ziva's total cost of farming is composed of two different costs: explicit and implicit costs.

Explicit cost is an out-of-pocket cost that a person incurs to carry out a particular business activity. It is sort of, a business-related expense for which the business pays. In Ziva's case, it is $130, the cost of the seeds

Implicit costs are opportunity costs. An opportunity cost refers the benefits an individual, investor or business misses out on when opting for one alternative in preference of another. In our case, it amounts to $250($25*10 hours)

Thus, Ziva's cost of farming

= $130 +( $25*10) = $130 +$250 = $380

5 0
3 years ago
Acme Home Lending offers home equity loans up to 80% of the home value for its customers. If Sally Johnson has a home valued at
EastWind [94]

Answer:

She can borrow $110,000 in a home equity loan from Acme

Explanation:

Home equity loan is available to the 80% of the Home value. sally has already a mortgage of $50,000 so she can only borrow the differential amount of Allowable loan and existing loan.

As per given data

Home value = $200,000

Allowable Loan limit = $200,000 x 80% = $160,000

Existing Loan = $50,000

Available limit of Loan = Allowable Loan limit - Existing Loan = $160,000 - $50,000 = $110,000

She can borrow $110,000 in a home equity loan from Acme

7 0
3 years ago
들 (a) What are the entrepreneurial opportunities you can find in retail sector in india?​
dexar [7]

Answer:

It generates huge employment opportunities. This has changed the face of retailing in India. As the sector is booming in India, a career in retail sector is promising a growth potential for the ambitious youngsters.

The candidates are trained in supply chain management, finance management, marketing information, electronic retailing, marketing and business communication, customer relationship etc. With rapidly expanding departmental stores and huge shopping malls, plenty of job opportunities are opening all over India.

Sales and related jobs

Store manager

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Regional sales manager

Finance and accounting

Explanation:

Hope it helps

8 0
2 years ago
One major negative effect of globalization has been:
aleksandrvk [35]

Answer:

A. environmental damage due to increased production.

Explanation:

Globalization can be defined as the strategic process which involves the integration of various markets across the world to form a large global marketplace.

Basically, globalization makes it possible for various organizations to produce goods and services that is used by consumers across the world.

Hence, one of the major advantages of globalization is that, it has ensured or made it possible such that economic and environmental conditions in different countries of the world are related and linked with the intention of generating revenue and profits while providing goods and services to meet the demands or requirements of various consumers across the world.

However, one major negative effect of globalization has been environmental damage or pollution due to increased production by various companies across the world.

Pollution can be defined as the physical degradation or contamination of the environment through an emission of harmful, poisonous and toxic chemical substances.

4 0
3 years ago
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