Boris Stock Has an Average Return of 15 Percent

question 34

Multiple Choice

Boris stock has an average return of 15 percent. Its beta is 1.5. Its standard deviation of returns is 25 percent. The average risk-free rate is 6 percent. The Sharpe index for Boris stock is

• A) 0.35.
• B) 0.36.
• C) 0.45.
• D) 0.28.
• E) none of the above

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Definitions:

Forecast Accuracy

The degree to which forecasted values approach the actual realized values.

Mean Absolute Deviation

The average of the absolute differences between each value in a set of values and the mean of the set, used to quantify variability.

Sum of Squares

A statistical technique used to describe the amount of variation or dispersion of a set of data points.

Mean Absolute Deviation

The mean absolute deviation is a measure of dispersion in a dataset, calculated as the average of the absolute differences between each data point and the dataset's mean.