Your Portfolio Has an Expected Return of 12

question 24

Multiple Choice

Your portfolio has an expected return of 12.9%, a beta of 1.52, and a standard deviation of 19.4%. The U.S. Treasury bill rate is 1.35%. What is the Sharpe ratio of your portfolio?

• A).595
• B).673
• C).700
• D).773
• E).838

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Definitions:

Exit

The process by which businesses cease operations and leave a market, often due to unprofitability or strategic realignment.

Economies of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Technology

The application of scientific knowledge for practical purposes, especially in industry.

Positive Profits

The financial gain that occurs when total revenue exceeds total costs.