A Portfolio Has a Beta of 1

question 81

Multiple Choice

A portfolio has a beta of 1.23 and a standard deviation of 11.6 percent.What is the Sharpe ratio if the market return is 12.4 percent and the market risk premium is 7.9 percent?

• A) 0.07
• B) 0.11
• C) 0.65
• D) 0.84
• E) 0.90

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Definitions:

Deductible Student Loan Interest

Refers to the interest paid on a qualified student loan which may be deducted from income when calculating federal income tax.

Self-Employed Health Insurance

A tax deduction available to self-employed individuals for premiums paid on medical, dental, and long-term care insurance for themselves and their dependents.

Above-The-Line

refers to deductions that taxpayers are allowed to subtract from gross income to arrive at the adjusted gross income, which are beneficial as they are not subject to itemized deductions limitations.

Child Support Payment

Payments made by a non-custodial parent to support their child or children's living expenses.