A Portfolio Consists of the Following Two Funds What Is the Sharpe Ratio of the Portfolio?
A)

question 6

Multiple Choice

A portfolio consists of the following two funds:
$\begin{array}{lrr}&\text { Fund A }& \text { Fund B }\\\text { Expected Return } & 13 \% & 9\% \\\text { Standard deviation } & 16 \% & 10\% \\\text { Eortfolio market value } & \$ 6,000 & \$ 14,000\\\text {Correlation}{R}_A,{R}_B&0.54\\\text { Rigk-free rate }&4\%\end{array}$
What is the Sharpe ratio of the portfolio?

• A).391
• B).453
• C).529
• D).596
• E).640

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Definitions:

Continuous Improvement

An ongoing effort to improve products, services, or processes by making small, incremental changes over time.

Profitability

A measure of the efficiency and effectiveness of a company in generating profits from its operations, indicative of its financial health over time.

Flexible Pricing

A pricing strategy where the price of a product or service can vary based on market conditions, customer demand, or other factors.

TQM

Total Quality Management, a comprehensive management approach focusing on continuous quality improvement, customer satisfaction, and involvement of all employees.