The volatility of the market portfolio is 10%, the expected market return is 12%, and the risk-free

Fantastic news! We've Found the answer you've been seeking!

Question:

The volatility of the market portfolio is 10%, the expected market return is 12%, and the risk-free interest rate is 4%.

Calculate Sharpe ratio for the market portfolio.

(Show work)

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-1337395250

15th edition

Authors: Eugene F. Brigham, Joel F. Houston

See More Books

Posted Date: Oct 27, 2023 01:58 AM

See More Questions

Lionel Willemse (age 46), a SA tax resident, made the following gains and losses in the 2024 year of assessment: Loss from sale of rental property - R140 000 Gain from sale of shares - R490 000...
Write the History of Heart Attack and Angina Pectoris:
Last Sale Net Bid Ask Open Int Puts Last Sale Net bid Ask Vol Open Int 16Aug 155.00(1619H155-E) 6.45 0.75 6.95 7.25 9 16Aug 155.00(1619T155-E) 1.18 (0.75) 1.17 1.25 61 4505 16Aug 166.00(1619H160-E)...
At one time the Thames River in England supported an abundant community of fish. Pollution then destroyed all the fish in a 40-mile stretch near its mouth for a 45-year period beginning in 1915....
The Murphy & Kent partnership has the following balances on June 30, 2018: MURPHY & KENT Balance Sheet June 30, 2018 Murphy and Kent share profits 3:2, respectively. Murphy and Kent decide to...
1. Who is considered to be the first true physicist and what did he do to deserve this recognition in scientific history? 2. Explain the difference between science and technology. Are the two fields...
Gibbs' free energy of a pure fluid approaches at constant temperature (a) Infinity (b) Minus infinity (c) Zero (d) None of these.
The demand function good X is ln Qdx = a + b ln Px + c ln M+e, where Px is the price of good X and M is income. Least squares regression reveals that = 5.25, b = 1.36, and c = 0.14. a. If M =...
1. List AND explain 3 concepts one must learn about Plain View, Open fields, abandonment, and border searches. 2. List AND explain 3 concepts one must learn about Lineups and other means of Pretrial...
George and Harry Haygood are building contractors who specialize in the construction of private home dwellings, storage warehouses, and small businesses (less than 20,000 sq. ft. of floor space)....
A government-restrictions monopoly is most likely to result if a single firm: A. is the only seller in a small town or community. B. is investor-owned, but granted the exclusive right by the...
Why does the assumption that the firm maintains a constant debt-equity ratio simplify the flow-to-equity calculation?
What is the name for export/import financing in which the importers bank issues a letter pledging to pay the exporter when the exporter fulfills the terms listed in the letter?
What is it called when a company supplies intangible property and other assistance over an extended period of time?
Kevin deliberately omitted $40,000 of gross income from his restaurant on his 2017 tax return. The return indicated gross income of $200,000 when filed on April 14, 2018. When can the IRS no longer...
What factors related to brand and product names might influence a companys international product strategy?
A 18 kg cannon ball is fired from a cannon with muzzle speed of 1192 m/s at an angle of 52.8 with the horizontal. The acceleration of gravity is 9.8 m/s. Use conservation of mechanical energy to find...
DC has unused FTC carryover from 2017 in the separate category for GC income as the result of income generated by a foreign branch. The income was foreign source general category income. In 2018 the...
Bond X is noncallable and has 20 years to maturity, an 8% annual coupon, and a $1,000 par value. Your required return on Bond X is 9%; if you buy it, you plan to hold it for 5 years. You (and the...
What is the implied nominal interest rate on a 10-year U.S. T-notes ($100,000)futures contract that settled at 103060? If interest rates increased by 3%, what would be the contracts new value?
a. Assume (1) that NWC was operating at full capacity in 2018 with respect to all assets, (2) that all assets must grow at the same rate as sales, (3) that accounts payable and accrued liabilities...
A pressure-vessel head is supported by a set of steel cables of length $2 \mathrm{~m}$ as shown in Fig. 2.75. The time period of axial vibration (in vertical direction) is found to vary from \(5...
The crate, of mass $250 \mathrm{~kg}$, hanging from a helicopter (shown in Fig. 2.74(a)) can be modeled as shown in Fig. 2.74(b). The rotor blades of the helicopter rotate at $300 \mathrm{rpm}$....
The inclined manometer, shown in Fig. 2.73, is used to measure pressure. If the total length of mercury in the tube is $L$, find an expression for the natural frequency of oscillation of the...

The volatility of the market portfolio is 10%, the expected market return is 12%, and the risk-free

Question:

Expert Answer:

The Sharpe ratio is a measure of the riskadjusted return of an investment o... View the full answer

Fundamentals of Financial Management

Students also viewed these finance questions