A portfolio's expected return is 12%, its standard deviation is 20%, and the risk-free rate is 4%.

Question:

A portfolio's is 12%, its standard deviation is 20%, and the risk-free rate is 4%. Which of the following would make for the greatest increase in the portfolio's Sharpe ratio?
a. An increase of 1% in the
b. A decrease of 1% in the risk-free rate
c. A decrease of 1% in its standard deviation

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...