Question: 25. (a) Interpret the Sharpe ratio when excess returns are negative. What is (are) the potential problem(s) of using Sharpe ratio as the objective function

25. (a) Interpret the Sharpe ratio when excess returns are negative.

25. (a) Interpret the Sharpe ratio when excess returns are negative. What is (are) the potential problem(s) of using Sharpe ratio as the objective function to maximize in order to find optimal portfolio if the excess returns are expected to be negative? Discuss, with example(s) to illustrate. (b) How would you overcome these problems? Discuss

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