A Portfolio Has a Sharpe Ratio of 0

question 57

Multiple Choice

A portfolio has a Sharpe ratio of 0.74,a standard deviation of 18.0 percent,and an expected return of 15.9 percent.What is the risk-free rate?

• A) 1.98 percent
• B) 2.36 percent
• C) 2.58 percent
• D) 3.09 percent
• E) 3.15 percent

---

Definitions:

Participative Behaviour

Actions that involve taking part or contributing in a group or activity, often referring to a management style that includes employees in decision making.

Path-Goal Theory

A leadership theory that suggests leaders can increase subordinate satisfaction and performance by clarifying paths to goals and removing obstacles to performance.

Trait Approach

A theory in psychology that suggests individual personalities are composed of broad dispositions, or traits, which influence behavior.

Fiedler's Contingency Theory

A leadership theory proposing that effective group performance depends on the proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control to the leader.