Question: 1. A stock's average return is 11 percent. The average risk-free rate is 9 percent. The stock's beta is 1, and the standard deviation its

1. A stock's average return is 11 percent. The average risk-free rate is 9 percent. The stock's beta is 1, and the standard deviation its returns is 10 percent. What is the Sharpe index? 05 .5 .1 02 2

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Consider the national market for in-home child care in the accompanying graph. a. At 10 million hours, what is the size of total economic surplus in this market? Label the area representing total...

A stock's average return is 11 percent. The average risk-free rate is 2 percent. The stock's beta is 1 and its standard deviation of returns is 12 percent. What is the Sharpe Index?

QUESTION 2. [10 marks, 2 marks each] 2.1 A stocks average return is 12.5 percent. The average risk-free rate is 8.59 percent. The stocks beta is 1.5 and its standard deviation of returns is 12...

Problem 9-1 The market has an expected return of 11 percent, and the risk-free rate is 5%. Pfizer has a beta of 0.9. What is the required return for Pfizer? Problem 9-4 The expected return for the...

Consider the following information on Stocks I and II: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock I Stock II Recession .40 .05 -.17 Normal .40 .22 .14...

Rank the following three stocks by their risk-return relationship, best to worst. Rail Haul has an average return of 11 percent and standard deviation of 20 percent. The average return and standard...

Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 11 percent and standard deviation of 34 percent. The average return and standard...

6 Rank the following three stocks by their risk-return relationship, best to worst. Night Ryder has an average return of 11 percent and standard deviation of 45 percent. The average return and...

Microsoft Co. is expected to offer a dividend of $3.20 per share per year forever. The required rate of return on Microsoft stock is 13 percent. Thus, according to the dividend discount model, the...

Consider the following information on Stocks I and II: State of Probability of Rate of Return if State Occurs Economy State of Economy Stock I Stock II Recession .20 .010 .30 Normal .55 .320 .22...

If Argentina has relatively more land per worker, and Switzerland has relatively more capital per worker, then if trade began between these two countries the relative price of the land-intensive...

On January 1, 2020, Mark Company acquired 100% of Deriva Company in exchange for $2,000,000. The acquisition agreement also contained a contingent consideration clause to which Parrot assigned a fair...

Which of the following statements are correct regarding diversification requirements for participants in an ESOP? Group of answer choices Participants must have been in the plan for more than 1 5...

The audit report format: Current format and pervious short format. Structure suggested by IAASB (UK). Briefly discuss strength and weakness of both formats.