Question

What is the Sharpe ratio and why is a portfolio with a high Sharpe ratio generally preferred to one with a low Sharpe ratio?

Answer #1

My portfolio has a Sharpe ratio = 0.78 compared to the
S&P500 sharpe ratio of 0.46 for this period. Can I say that my
portfolio beat the market?

Why do we maximize the Sharpe ratio when we do portfolio
optimization?

(Asset Allocation) Assume your current portfolio has a
Sharpe ratio of 1.50. You are considering adding a new asset to the
portfolio which only has a Sharpe ratio of 1.25. The asset has a
0.80 correlation to the current portfolio. Based on this
information alone, you should add the new asset to the
portfolio. Evaluate the underlined words in
italics.
True
False
(Fixed Income) Effective duration is a more accurate
measurement of an instantaneous parallel change in the yield curve...

A profitable high-tech company would generally have: a. high
price-to-book ratio and high price-to-earnings ratio. b. high
price-to-book ratio and low price-to-earnings ratio. c. low
price-to-book ratio and high price-to-earnings ratio. d. low
price-to-book ratio and low price-to-earnings ratio.

Can a ratio be too high or too low? A higher current ratio is
generally considered to be better, but can a current ratio be too
high? What do you think?

23.
Sharpe ratio of portfolio A and B are 0.40 and 0.52 respectively.
Therefore, CAL(A) is _________ than CAL(B).
Select
one:
a.
Larger
b.
Steeper
c.
Smaller
d.
Flatter

explain what it meant by a sharpe ratio of 3. Does this ratio
differ from one asset to another? explain why or why not

given a sharpe ratio for the market portfolio of 0.4 . calculate
the expected return on stock with astardard deviation return of 0.5
and acorrelation with the market portfolio return of 0.6.the risk
free rate is 5% and the stardard deviation of the market portfolio
returns is 0.25

Calculate the Sharpe ratio of each of the three portfolios in
Problem 40 (the initial portfolio with 0% invested in Hannah, the
second portfolio with 40% invested in Hannah, and the third
portfolio with 15% invested in Hannah). What portfolio weight in
Hannah stock maximizes the Sharpe ratio?
Problem#40
You are currently only invested in the Natasha Fund (aside from
risk-free securities). It has an expected return of 14% with a
volatility of 20%. Currently, the risk-free rate of interest...

Assets should be considered to be included in a portfolio
A. if the asset class Sharpe ratio exceeds the product of the
existing portfolio’s Sharpe ratio and the correlation between the
asset class return and the portfolio’s return
B. if the asset class Sharpe ratio equals the product of the
existing portfolio’s Sharpe ratio and the correlation between the
asset class return and the portfolio’s return
C. if the correlation between the asset class return and the
portfolio’s return is...

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