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serious [3.7K]
3 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]3 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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<h3>What are tax ethics?</h3>

Tax ethics, is known to be the term for the taxpayer's moral duty to pay taxes, is influenced by their interaction with the government as citizens. Tax evasion and tax ethics are frequently used synonymously.

When filing taxes, a tax preparer should take certain ethical considerations into account:

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  • Inform the IRS and other tax authorities of the alleged fraudulent activities.
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Therefore, one can say that anyone who prepares a tax return may now be held accountable for errors committed in filing a return for someone else due to a change in tax regulations that took effect more than ten years ago. An IRS monetary penalty may be imposed on a tax preparer who made errors on your return.

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1 year ago
Staples sells office supplies and machines, furniture, and technology and business services both in stores and online. It sells
Snezhnost [94]

Answer:

Industry-wide differentiation strategy

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The target customers consist of wide range of people with different preferences.

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3 years ago
1. How do new tax laws get passed?
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Answer:

<u><em>Procedure to pass new tax laws:</em></u>

1. First, a representative sponsors a bill.

2. The bill is then assigned to a committee for study.

3. If released by the committee, the bill is put on a calendar to be voted on, debated or amended

4. If the bill passes by simple majority (218 of 435), the bill moves to the Senate.

5. After Congress passes the bill,

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Answer: Frustration

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Frustration is basically refers to the negative behavior and it also lead to demotivate the person towards their goals and it result due to the interpersonal interaction with others.

Therefore, Frustration is the correct answer.

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3 years ago
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Laws are created by the legislative branch, but the President, who is part of the executive branch, has the power to veto them.

<h3>How do the legislative and executive branches work together?</h3>
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