Use the Information for the Question(s)below

question 34

Multiple Choice

Use the information for the question(s) below.
Suppose that you currently have $250,000 invested in a portfolio with an expected return of 12% and a volatility of 10%.The efficient (tangent) portfolio has an expected return of 17% and a volatility of 12%.The risk-free rate of interest is 5%.
-The Sharpe ratio for the efficient portfolio is closest to:

• A)0.7.
• B)1.0.
• C)1.4.
• D)1.2.

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Definitions:

Salvage Value

The calculated future selling price of an asset at the end of its period of benefit.

Depreciation Expense

Dividing the expenditure associated with a tangible asset over its operational life.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its decrease in value due to use, wear and tear, or obsolescence.

Depletion

The allocation of the cost of natural resources over their productive life, commonly used in industries like mining and forestry.