If a Portfolio Had a Return of 15%, the Risk-Free

question 14

Multiple Choice

If a portfolio had a return of 15%, the risk-free asset return was 5%, and the standard deviation of the portfolio's excess returns was 30%, the Sharpe measure would be

• A) 0.20.
• B) 0.35.
• C) 0.45.
• D) 0.33.
• E) 0.25.

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Definitions:

Private Interests

Individual or group interests that are not public in nature, often seeking personal gain or advantage.

Invisible Hand

A metaphor introduced by Adam Smith to describe unintended social benefits resulting from individual actions.

Dictator Game

Rephrased: An experiment in behavioral economics where an individual (termed the "dictator") decides the allocation of a certain resource or amount of money between themselves and a second participant, without any enforceable consequences.