A Portfolio with a 25% Standard Deviation Generated a Return

question 6

Multiple Choice

A portfolio with a 25% standard deviation generated a return of 15% last year when T-bills were paying 4.5%.This portfolio had a Sharpe measure of ____.

• A) 0.22
• B) 0.60
• C) 0.42
• D) 0.25

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Definitions:

Aversion Therapy

A behavior therapy in which an aversive stimulus is paired with a harmful or socially undesirable behavior until the behavior becomes associated with pain or discomfort.

Undesirable Behavior

Actions or reactions that are not wanted or considered negative in a particular context.

Unpleasant Consequence

A negative outcome or punishment that follows an undesired behavior, used to decrease the likelihood of that behavior occurring again in the future.

Aversion Therapy

A form of psychological treatment where undesirable behaviors are paired with unpleasant stimuli to reduce the behavior.