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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%

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