A complete portfolio consists of a 1 million market value of risk-free assets and a 2...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A complete portfolio consists of a 1 million market value of risk-free assets and a 2 million market value of the risky portfolio. Risk-free rate= 2%, Expected return on risky portfolio=7%, op 30% What is the Sharpe ratio? A complete portfolio consists of a 1 million market value of risk-free assets and a 2 million market value of the risky portfolio. Risk-free rate= 2%, Expected return on risky portfolio=7%, op 30% What is the Sharpe ratio?
Expert Answer:
Answer rating: 100% (QA)
The Sharpe ratio is a measure of riskadjusted return which is calculated as the excess return ... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
Students also viewed these accounting questions
-
What is the Sharpe ratio of the best feasible CAL? A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund,...
-
Expected return and standard of a risky portfolio are 11% and 21% respectively. Risk-free rate is 5%. Mr. Yen constructed a complete portfolio with these two assets, which maximises his utility. If...
-
Portfolio 1 consists of 100,000 theft insurance policies. Portfolio 2 consists of 100,000 earthquake policies. Probability of event is 1% for each type. Assume independence of thefts, and that if...
-
Based on your reading of the rules of Professional Code of Conduct as given by AICPA, which part of the code did the accountants of Enron, Waste Management or Wells Fargo have violated and how about...
-
A car dealer is offering the following three two-year leasing options: Assume that a customer expects to drive between 15,000 to 35,000 miles during the next two years according to the following...
-
Search the newspapers/internet to find examples of Australian companies disclosing their sustainability practices using management accounting information or tools such as the balanced scorecard....
-
How do we discover business activities?
-
Refer to the data given in Problem 4.34 and suppose that the expected activity costs are reported as follows (all other data remain the same): Other overhead activities: Activity Cost Purchasing...
-
How do you navigate the delicate balance between the perceived urgency of immediate tasks and the long-term strategic allocation of temporal resources ? Explain
-
Simulation can be used to illustrate a number of results from statistics that are difficult to understand with non-simulation arguments. One is the famous central limit theorem, which says that if...
-
Discuss the current tax law for determining whether a company is a resident of Australia for tax purposes. In respect of residency tests, compare the Australian tax law to the tax law in one other...
-
Fill in the blanks to make the following statements correct. a. A regional trade agreement, such as the NAFTA, or a common market, such as the European Union, allows for ___________ , whereby trade...
-
Fill in the blanks to make the following statements correct. a. The ________ argument provided the rationale for Canada's National Policy of 187 6. A high tariff wall allowed many Canadian industries...
-
Suppose you currently earn $60,000 a year. You are considering a job that will increase your lifetime earnings by $600,000 but that requires an MBA. The job will mean also attending business school...
-
Say that the hourly cost to employers per German industrial worker is $43. The hourly cost to employers per U.S. industrial worker is $39, while the average cost per Taiwanese industrial worker is...
-
Theres a gas shortage in Gasland. Youre presented with two proposals that will achieve the same level of reduction in the use of gas. Proposal A would force everybody to reduce their gas consumption...
-
Find at least three different examples of Performance Appraisal Forms/Documents. Attach them to the discussion board. Answer the following questions, comparing the three examples: 1) What...
-
l ask this second time correnct answer is 38,01 can we look pls Consider a non-conducting rod of length 8.8 m having a uniform charge density 4.5 nC/m. Find the electric potential at P, a...
-
Garlington Technologies Inc.'s 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 Income Statement for December 31, 2016...
-
Assume you have just been hired as a business manager of Pizza Palace, a regional pizza restaurant chain. The company's EBIT was $50 million last year and is not expected to grow. The firm is...
-
AA Corporation's stock has a beta of 0.8. The risk-free rate is 4% and the expected return on the market is 12%. What is the required rate of return on AA's stock?
-
The following are summaries of the cash book and bank accounts of J. Duncan who does not keep his books using the double entry system. You are required to: (a) Calculate the value of J. Duncan's...
-
Read the following and answer the questions below. On 31 December 2015 the bank column of C. Tench's cash book showed a debit balance of 1,500. The monthly bank statement written up to 31 December...
-
The bank columns in the cash book for June 2016 and the bank statement for that month for D. Hogan are as follows: You are required to: () Write the cash book up to date to take the above into...
Study smarter with the SolutionInn App