AAPL has a Sharpe ratio of 2.5. GM has a Sharpe ratio of 1.2. Which of...
AAPL has a Sharpe ratio of 2.5. GM has a Sharpe ratio of 1.2. Which of the following statements is most correct?
Group of answer choices
GM's returns are 1.2% above the index, while AAPL's returns are 2.5% above the index.
AAPL has higher returns than GM.
GM has higher returns than AAPL.
AAPL has higher returns given the level of risk (or higher returns per unit of risk).
Homework Answers
The correct option is last option
The Sharpe ratio shows the return with a given level of risk that is above the risk free return, if the AAPL Stock has higher sharpe ratio then it means that the risk adjusted return of this stock is higher than GM.
Add Answer to:
AAPL has a Sharpe ratio of 2.5. GM has a Sharpe ratio of 1.2.
Which of...
13) An important measure of asset performance is called Sharpe ratio which is defined as ,...
13) An important measure of asset performance is called Sharpe ratio which is defined as , where and are the asset return and volatility (standard deviation of returns) respectively, and is risk- free return. Asset A has a return of 20% in upside state with probability of 0.4 and -10% in downside state with probability of 0.6 Asset B offers a 1.5% return with a volatility of 10%. Given a risk-free rate of 1%, which asset (A or B) provides...
13) An important measure of asset performance is called Sharpe ratio which is defined as SR=***,...
13) An important measure of asset performance is called Sharpe ratio which is defined as SR=***, where R and o are the asset return and volatility (standard deviation of returns) respectively, and Rf is risk-free return. Asset A has a return of 20% in upside state with probability of 0.4 and -10% in downside state with probability of 0.6 Asset B offers a 1.5% return with a volatility of 10%. Given a risk-free rate of 1%, which asset (A or...
13) An important measure of asset performance is called Sharpe ratio which is defined as SR=...
13) An important measure of asset performance is called Sharpe ratio which is defined as SR= , where R and o are the asset return and volatility (standard deviation of returns) respectively, and Rf is risk-free return. Asset A has a return of 20% in upside state with probability of 0.4 and -10% in downside state with probability of 0.6 Asset B offers a 1.5% return with a volatility of 10%. Given a risk-free rate of 1%, which asset (A...
You observe the following information regarding Company A and Company B: • Company A has a...
You observe the following information regarding Company A and Company B: • Company A has a higher expected return than Company B. • Company A has a lower standard deviation of returns than Company B. • Company A has a higher beta than Company B. Given this information, which of the following statements is CORRECT? a. Company A has a higher coefficient of variation than Company B. b. Company A’s returns will be negative when Company B’s returns are positive....
You observe the following information regarding Company A and Company B: Company A has a higher...
You observe the following information regarding Company A and Company B: Company A has a higher expected return than Company B. Company A has a lower standard deviation of returns than Company B. Company A has a higher beta than Company B. Given this information, which of the following statements is CORRECT? a. Company A has more company-specific risk than Company B. b. Company A has a higher Sharpe ratio than Company B. c. Company A has a higher coefficient...
Based on the ratio analysis below, in which company would you be willing to invest and why? RATIOS S&P 500 For...
Based on the ratio analysis below, in which company would you be willing to invest and why? RATIOS S&P 500 Ford Motor Co General Motors Co ANALYSIS Profitability Ratios (%) Gross Margin 15.01 17.9 General Motors Company (GM) has higher ratios than Ford Motors(FM) which indicates GM has higher profitability than FM. Particularly the EBITDA margin and operating margins reflect GM has an edge over FM. EBITDA Margin 8.66 15.55 Operating Margin 2 3 Pre-Tax Margin 2.71 5.81 Effective Tax...
21. Which of the following statements is most likely FALSE: The SP500 index has a higher...
21. Which of the following statements is most likely FALSE:
The SP500 index has a higher beta than Stock B
The SP500 index has a higher beta than Stock A
Stock A has a higher beta than Stock B
Stock A index has a beta of 0.80
The SP500 index has a beta of 1.20
22. Over the past six years, which of the following statements
is most likely TRUE:
The SP500 index has the highest arithmetic average return, but...
8.2 The coefficient of variation is a better measure of stand-alone risk than standard deviation because...
8.2
The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it is calculated as the -Select- divided by the expected return. The coefficient of variation shows the risk per unit of return, so it provides a more meaningful risk measure when the expected returns on two alternatives are not -Select- .. The Sharpe ratio compares the asset's realized excess return to its -Select- over a...
The following statements refer to genetically-modified (GM) organisms. Which of the following statements (A-D) are TRUE?...
The following statements refer to genetically-modified (GM) organisms. Which of the following statements (A-D) are TRUE? Choose all that are TRUE, or choose "None of the other statements are true" (can be more than 1 option, or maybe its just 1) Group of answer choices GM insects have never been intentionally released into the wild None of the other statements are true Since the time that glyphosate-tolerant crops were introduced (mid-1990’s), no glyphosate-resistant weeds have emerged GM crops have been...
Monthly price data for Apple (AAPL) and the S&P500 (^SPX) are contained in the attached Excel...
Monthly price data for Apple (AAPL) and the S&P500 (^SPX) are contained in the attached Excel spreadsheet. These are adjusted end-of-month prices that incorporate any dividend payments. Calculate monthly returns for AAPL and the S&P using the adjusted end of month prices. Calculate the beta for AAPL using the S&P 500 returns as your market index. Use the formula in the notes. This will require you to calculate the covariance of AAPL’s returns with those of the S&P 500 and...
13) An important measure of asset performance is called Sharpe ratio which is defined as , where and are the asset return and volatility (standard deviation of returns) respectively, and is risk- free return. Asset A has a return of 20% in upside state with probability of 0.4 and -10% in downside state with probability of 0.6 Asset B offers a 1.5% return with a volatility of 10%. Given a risk-free rate of 1%, which asset (A or B) provides...
13) An important measure of asset performance is called Sharpe ratio which is defined as SR=***, where R and o are the asset return and volatility (standard deviation of returns) respectively, and Rf is risk-free return. Asset A has a return of 20% in upside state with probability of 0.4 and -10% in downside state with probability of 0.6 Asset B offers a 1.5% return with a volatility of 10%. Given a risk-free rate of 1%, which asset (A or...
13) An important measure of asset performance is called Sharpe ratio which is defined as SR= , where R and o are the asset return and volatility (standard deviation of returns) respectively, and Rf is risk-free return. Asset A has a return of 20% in upside state with probability of 0.4 and -10% in downside state with probability of 0.6 Asset B offers a 1.5% return with a volatility of 10%. Given a risk-free rate of 1%, which asset (A...
21. Which of the following statements is most likely FALSE:
The SP500 index has a higher beta than Stock B
The SP500 index has a higher beta than Stock A
Stock A has a higher beta than Stock B
Stock A index has a beta of 0.80
The SP500 index has a beta of 1.20
22. Over the past six years, which of the following statements
is most likely TRUE:
The SP500 index has the highest arithmetic average return, but...
8.2
The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it is calculated as the -Select- divided by the expected return. The coefficient of variation shows the risk per unit of return, so it provides a more meaningful risk measure when the expected returns on two alternatives are not -Select- .. The Sharpe ratio compares the asset's realized excess return to its -Select- over a...
Most questions answered within 3 hours.
-
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 19 minutes ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 22 minutes ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 1 hour ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 2 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 3 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 3 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 3 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 4 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 4 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 4 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 4 hours ago -
Consider the following reaction: C 2H 2( g) + 2H 2( g) C 2H 6(
g)...
asked 5 hours ago