A Portfolio with a 25% Standard Deviation Generated a Return

question 70

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 ratio of ________.

• A) .22
• B) .60
• C) .42
• D) .25

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Definitions:

Implicit Associations

The subconscious linking of two concepts or entities in the mind, which can influence attitudes and behavior.

Stereotype

A fixed, generalized idea or image of a particular group of people, often lacking nuance and accuracy.

Availability Heuristic

A quick thinking process where a person leans on the first examples that surface in their thoughts when considering a certain subject, notion, procedure, or judgment.

Explicit Bias

Prejudices or attitudes that an individual is consciously aware of and can report.