Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

18. Based on the data in the tables above, what is the Potential Sharpe Ratio for AMZN if it is added to a current investors

image text in transcribed

18. Based on the data in the tables above, what is the Potential Sharpe Ratio for AMZN if it is added to a current investors holding of an SPY index fund? Sharpe Ratio for S&P 500 is 0.41165, SPY is proxy for S&P 500.

A. 0.2592

B. 0.3659

C. 0.6218

D. 0.7549

\begin{tabular}{|l|c|c|} \hline & R(S\&P 500) & AMZN \\ \hline Average & 2.59% & 4.36% \\ \hline Variance & 0.00085 & 0.00660 \\ \hline St. Dev. & 5.32% & 8.13% \\ \hline & & \\ \hline Intercept & & 0.0302 \\ \hline Beta & 1 & 1.6811 \\ \hline Var ( ei) & & 0.0042 \\ \hline St. Dev. (ei) & & 6.48% \\ \hline \end{tabular} Rf0.40%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Multinational Business Finance

Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett

11th Edition

0321357965, 978-0321357960

More Books

Students also viewed these Finance questions

Question

Identify ways to increase your selfesteem.

Answered: 1 week ago