Question: The standard deviation and returns for the funds over the past 10 years are listed here. Assuming a risk-free rate of 4 percent, calculate the

The standard deviation and returns for the funds over the past 10 years are listed here. Assuming a risk-free rate of 4 percent, calculate the Sharpe ratio for each of these. In broad terms, what do you suppose the Sharpe ratio is intended to measure?

10-Year Annual Return Standard Deviation

Arias S&P 500 Index Fund 9.15% 19.35%

Arias Small-Cap Fund 14.05 26.82

Arias Large-Company Stock Fund 9.53 23.82

Arias Bond Fund 8.73 11.45

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