The Expected Return on the Market Is 12% with a Standard

question 60

Multiple Choice

The expected return on the market is 12% with a standard deviation of 20%.The risk-free rate is 4.5%.What is the Sharpe ratio of a portfolio with an expected return of 10.5% and a standard deviation of 12%?

• A)0.38
• B)0.50
• C)0.70
• D)0.88

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Definitions:

Farm Subsidies

Financial assistance provided by the government to farmers to supplement their income, stabilize food prices, and ensure a reliable supply of agricultural products.

Crop Production

The process of growing crops for food, fiber, biofuel, medicinal plants, or other uses.

Consumer Incomes

The total earnings of consumers from all sources, including wages, investments, and government benefits, which influence their buying power and demand for goods and services.

Acreage Allotment Programs

A policy mechanism aimed at controlling the production of certain crops by allocating a specific acreage for their cultivation to manage supply and stabilize or improve prices.