If a Portfolio Had a Return of 8%, the Risk-Free

question 72

Multiple Choice

If a portfolio had a return of 8%, the risk-free asset return was 3%, and the standard deviation of the portfolio's excess returns was 20%, the Sharpe measure would be

• A) 0.08.
• B) 0.03.
• C) 0.20.
• D) 0.11.
• E) 0.25.

---

Definitions:

Machine-Hours

A measure of the amount of time a machine is operated, used as a basis for allocating overhead costs in manufacturing.

Forming

The process of shaping material into a desired geometry, often through methods like forging, molding, or casting.

Customizing

Modifying or adapting a product, service, or process to meet specific customer needs or preferences.

Manufacturing Overhead

All manufacturing costs aside from the costs of direct materials and direct labor, encompassing expenses such as maintenance, utilities, and rent of the production facility.