A Portfolio Has a Beta of 1

question 92

Multiple Choice

A portfolio has a beta of 1.35, a standard deviation of 13.3%, and an average return of 12.01%. The market rate is 12.7% and the risk-free rate is 2.1%. What is the Sharpe ratio?

• A).716
• B).745
• C).754
• D).847
• E).863

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Definitions:

Double-blind Studies

Research designs in which neither the participants nor the experimenters know who is receiving a particular treatment, reducing biases.

Placebo Effect

The phenomenon in which a person's condition appears to improve after taking a placebo, a treatment that has no therapeutic effect, due to the individual's belief in the treatment's efficacy.

Experimenter Effect

A phenomenon where the biases or expectations of the experimenter inadvertently influence the outcome of an experiment.

Random Assignment

A method used in experiments to evenly distribute participants across various groups, ensuring that each has an equal chance of being assigned to any group.