8. Risk-adjusted stock measurement methods: Sharpe index Suppose you know the following information about two stocks: Stock Average Monthly Return Annualized Risk-Free Rate A 1.59% Standard Deviation of Monthly Returns 1.89 2.29 B 0.89 0.39% Based on the information in the table, which stock has a higher return? Stock A Stock B Based on the information in the table, which stock has a higher level of risk? Stock A Stock B There are several ways in which investors can measure a stock's risk. One is to examine the volatility of stock returns by using the reward-to-variability ratio, also known as the Sharpe index. Based on the information in the table, the Sharpe index for stock A is: 0.3333 0.4667 0.6667 1 Based on the information in the table, the Sharpe index for stock B is: O 0.1364 0.1818 0.2273 0.2955 Based on the Sharpe ratios, which stock offers more expected excess return per unit of risk? Stock Stock B