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Suppose you own Stocks A and B. Based on date over the past decade, the Sharpe...

Suppose you own Stocks A and B. Based on date over the past decade, the Sharpe ratio for Stock A is 1.3, while the Sharpe ratio for stock B is 0.8. Which stock has performed better?                                                         

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Answer #1

Stock A has performed well because excess return per unit risk is more in case of A of 1.3 is more than 0.8

Sharpe Ratio =( Return in portfolio - Risk free rate)/Standard Deviation

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