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Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 10 percent and 7 percent, respectively. The risk free rate is 1%. According…

Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 10 percent and 7 percent, respectively. The risk free rate is 1%. According…
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Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 10 percent and 7 percent, respectively. The risk free rate is 1%. According to the Sharpe ratio, which fund performed better

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User Carlos Goce
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1 Answer

2 votes

Answer:

Step-by-step explanation:

The Sharpe ratio is given by:

(Return of portfolio - risk free rate) / standard deviation.

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User Dan Parsonson
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