A Portfolio Consists of the Following Two Funds

question 17

Multiple Choice

A portfolio consists of the following two funds. What is the Sharpe ratio of the portfolio?

• A) 0.422
• B) 0.547
• C) 0.645
• D) 0.721
• E) 0.798

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Definitions:

Biweekly Paycheck

A payment method where employees receive wages every two weeks, resulting in 26 paychecks per year.

Compounded Monthly

The interest calculation method where interest is added to the principal balance monthly, leading to interest on interest.

Conservative Investment

An investment strategy focused on preserving capital and generating a reliable, but possibly lower, return.

Retirement Account

A financial account specifically designated for saving and investing for retirement, offering tax benefits.