Your Portfolio Has an Expected Return of 15

question 21

Multiple Choice

Your portfolio has an expected return of 15.6 percent, a beta of 1.31, and a standard deviation of 15.3 percent. The U.S. Treasury bill rate is 3.8 percent. What is the Sharpe ratio of your portfolio?

• A) .67
• B) .69
• C) .74
• D) .77
• E) .83

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Definitions:

Impair

To weaken or damage someone's abilities or functionality in a certain area, such as impairing one's judgment or physical capacities.

Improve

Refers to the act of making something better or enhancing its value, quality, or effectiveness.

Evaluation Apprehension

Anxiety stemming from the possibility of being judged or evaluated by others.

Arousal

A physiological and psychological state of being awake or reactive to stimuli, often associated with increased heart rate and alertness.