Question: Asset s expected return and variance are 5 % and 2 5 % respectively. Risk - free rate is 0 . What is the asset

Assets expected return and variance are 5% and 25% respectively. Risk-free rate is 0. What is the assets Sharpe ratio?

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!

Q:

One share of stock Z is selling for $10. The stock has the following possible payoffs after one year: Slump Normal Boom $8 $12 $16 Assume equal probability for each state of the economy. 1) Calculate...

Q:

You are a manager of a risky portfolio p (consists of bonds and stocks) with an expected return E(p) = 16% and standard deviation sdevp = 22%. The risk free rate rf = 7% and the standard deviation of...

Q:

Use the following information to answer Questions 7 to 11: You are a manager of a risky portfolio (consists of bonds and stocks) with an expected return E(rp) = 8% and standard deviation stdevp =...

Q:

Question (20 points): Assume the CAPM holds. You are given the following information on returns on efficient portoflios: Mean Portfolio 1 0.0982 Portfolio 2 0.2270 Standard Deviation 0.12 0.35...

Q:

Question (20 points): Assume the CAPM holds. You are given the following information on returns on efficient portoflios: Mean Portfolio 1 0.0982 Portfolio 2 0.2270 Standard Deviation 0.12 0.35...

Q:

Question (20 points): Assume the CAPM holds. You are given the following information on returns on efficient portoflios: Mean Portfolio 1 0.0982 Portfolio 2 0.2270 Standard Deviation 0.12 0.35...

Q:

Ahmad is a portfolio manager at Albani Investment Fund in Riyadh . He manages a portfolio namely Murabahah Fund with a total amount of SR200,000. Assume that this fund has 20% expected return and 25%...

Q:

Continuing Value, Cost of Capital, and Moving from Enterprise Value to Value per Share Bo Corp. expects NOPLAT of $2,500,000 in the first year after the forecast period (or the first year of...

Q:

You own a stock portfolio Invested 25 percent In Stock Q, 20 percent in Stock R, 40 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are 81, 119, 120, and 137,...

Q:

SECTION A SECTION B stion 3 Question 4 a. Discuss the primary motives for companies to go pubic. Stock 7 marks) 0.56 0.14 b. Critically evaluate the main reasons for IPO underpricing. 15% 17% 6% (13...

Q:

Maxxim Inc. prepared the following performance graphs for the prior year: What do these appear toindicate? Total Manufacturing Lead Time 70 60 50 n 40 30 20 10 1 2 3 4 5 6 7 8 9 10 11 12 Months Total...

Q:

Suppose that La-Z-Boy in E2-7 signed a debt covenant specifying that current assets must exceed current liabilities by $200 million. Assume further that in early January 2010, the company planned to...

Q:

A trade that should be profitable when the BSM call option price is less than the observed market price would involve _ _ _ _ _ _ _ _ . Buying the call and buying a put, buying the stock and...

Q:

Describe how total variable costs and unit variable costs behave with changes in the level of activity. If fixed costs increase, what would be the impact on the contribution margin and income from...