The Sharpe ratio measure on a portfolio which earns 12 percent, with a standard deviation of...
The Sharpe ratio measure on a portfolio which earns 12 percent, with a standard deviation of 30 percent and beta of 1.27 is:
A. 0.40
B. 0.094
C. 0.508
D. There is not enough information.
I am leaning towards not having enough information because the Sharpe's ratio also needs the average risk-free rate of return. Am I correct?
Homework Answers
Please find below the solution... let me know if you need any clarification.
Correct answer is option : D. There is not enough information.
Formula for Sharpe ratio is = (Portfolio return - Risk free rate)/standard deviation.
We are missing risk free rate, therefore answer is option D.
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