Portfolio 
S&P 500 

Average Annual Return 
12% 
10% 
Standard Deviation 
18% 
15% 
Beta 
1.2 
1 
Riskfree rate = 
2% 
1) SHARPE RATIO:
Formula= RETURN OF PORTFOLIO  RISK FREE RATE
Standard deviation
= Portfolio = 0.12  0.02
0.18
Ans= 0.56
FOR S&P500 SHARPE RATIO WILL BE
=0.10  0
0.15
Ans =0.67
2) TREYNOR RATIO;
FORMULA: Portfolio return  risk free rate
Portfolio beta
For portfolio
= 0.12  0.02
1.2
=0.083
For S&P500
= 0.10  0
1
=0.1
JENSENS ALPHA;
FORMULA = α = Rp – [Rf + (Rm – Rf) β]
Portfolio= 0.12(0.02+(0.180.02)1.2)
= 0.12(0.21)
= 0.092
S&P500
=0.10(0+(0.150)1)
= 0.10(0.15)
= 0.05
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