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portfolio A' s sharp ratio=1.578, return=1.14%, risk=1.4% portfolio B 's sharp ratio=1.224, return=1.10%, risk=1.8% provide a...

portfolio A' s sharp ratio=1.578, return=1.14%, risk=1.4%

portfolio B 's sharp ratio=1.224, return=1.10%, risk=1.8%

provide a short qualitative and quantitative comparison. Quantitative comparison will compare Sharpe’s ratio. while the qualitative comparison will discuss the quantitative comparison.

thanks a lot

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Answer #1

Quantitative Comparison:

As can be seen that the Sharpe ratio of portfolio A is higher than the Sharpe ratio of portfolio B, which means that the portfolio A is yielding better risk adjusted returns than portfolio B. So, in terms of Sharpe ratio, portfolio A performs better.

Qualitative comparison

Project A offers higher return and that too at a lower risk as compared to portfolio B. So it can be said that portfolio A is better than portfolio B in terms of the return, risk and Sharpe ratio as well

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