A Portfolio Has a Beta of 1

question 91

Multiple Choice

A portfolio has a beta of 1.26, a standard deviation of 15.9%, and an average return of 15.07%. The market rate is 12.7% and the risk-free rate is 3.6%. What is the Sharpe ratio?

• A).616
• B).684
• C).721
• D).847
• E).880

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Definitions:

Promissory Estoppel

A legal concept that bars a person from canceling a promise made to someone else if that individual has sensibly relied on the promise to their misfortune.

Contract

A contract between two or more parties that is recognized and enforceable under the law.

Consideration

Something of value that is exchanged between parties in a contract, making the agreement legally binding.

Extra Vacation Week

An additional week of vacation granted beyond the standard allocated time, often as a benefit or reward.