You are provided below with annual return, standard deviation of returns, and tracking error to the...

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Finance

You are provided below with annual return, standard deviation ofreturns, and tracking error to the relevant benchmark for threeportfolios. Please calculate the Sharpe Ratio for the threeportfolios
Portfolio
Return
Standard Deviation
Tracking Error
1
15.50%
19.00%
1.50%
2
13.25%
24.00%
7.00%
3
18.00%
23.00%
8.00%
Index
14.00%
20.00%
Risk-Free
5.00%

Answer & Explanation Solved by verified expert

3.6 Ratings (521 Votes)

Sharpe Ratio It indicates the return over and above the risk free return of the portfolio adjusted with risk associated with the portfolio It gives an idea to investor how much return is See Answer

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Transcribed Image Text

You are provided below with annual return, standard deviation ofreturns, and tracking error to the relevant benchmark for threeportfolios. Please calculate the Sharpe Ratio for the threeportfoliosPortfolioReturnStandard DeviationTracking Error115.50%19.00%1.50%213.25%24.00%7.00%318.00%23.00%8.00%Index14.00%20.00%Risk-Free5.00%

Portfolio	Return	Standard Deviation	Tracking Error
1	15.50%	19.00%	1.50%
2	13.25%	24.00%	7.00%
3	18.00%	23.00%	8.00%
Index	14.00%	20.00%
Risk-Free	5.00%