A Portfolio Has an Average Return of 14 Percent, a Standard

question 35

Multiple Choice

A portfolio has an average return of 14 percent, a standard deviation of 27 percent, and a beta of 1.15. The risk-free rate is 4.5 percent, and the expected return of the market is 12 percent. What is the Sharpe ratio for the portfolio?

• A) 0.21
• B) 0.43
• C) 0.35
• D) 0.26
• E) 0.31

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Definitions:

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

Positioning Statement

A marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer.

Target Market

A specific group of consumers identified as the intended audience for a product or service, based on demographics, interests, and needs.

Core Market

The core market is the primary segment or audience that a company targets with its products or services, often considered the central focus of its business efforts and resources.