Mutual fund A had an annual return of 10% and the annual standard deviation of its...

 

Transcribed Image Text:

Mutual fund A had an annual return of 10% and the annual standard deviation of its excess return is 32%. The average yield on Treasury bills during the same period is 3%. The excess return on mutual fund B had a standard deviation of 16%. What average return would give fund B the same Sharpe ratio as fund A? Enter your answer as a decimal (not percentage). Mutual fund A had an annual return of 10% and the annual standard deviation of its excess return is 32%. The average yield on Treasury bills during the same period is 3%. The excess return on mutual fund B had a standard deviation of 16%. What average return would give fund B the same Sharpe ratio as fund A? Enter your answer as a decimal (not percentage).

Answer rating: 100% (QA)

To solve this question we need to calculate the Sharpe ratio for Mutual fund A and then use that Sha... View the full answer