A Stock's Average Return Is 11 Percent

question 61

Multiple Choice

A stock's average return is 11 percent. The average risk-free rate is 9 percent. The stock's beta is 1 and its standard deviation of returns is 10 percent. What is the Sharpe Index?

• A).05
• B).5
• C).1
• D).02
• E).2

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Definitions:

Intermolecular

Pertaining to forces or interactions occurring between molecules, affecting their physical properties and behaviors.

Halite

A mineral commonly known as rock salt, composed primarily of sodium chloride (NaCl), and typically forms from evaporated seawater.

Chlorine

A chemical element with symbol Cl and atomic number 17, a yellow-green gas at room temperature, widely used in water purification, in disinfectants, and in the production of various chemicals.

Sodium

A chemical element with the symbol Na, known for its high reactivity and essential role in biological systems, especially in nerve impulse conduction.