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Fidelity large cap fund has a Sharp ratio of 0.7 and expected return of 18%. Fidelity small cap has a Sharpe ratio of 0.5 and
Fidelity large cap fund has a Sharp ratio of 0.7 and expected return of 18%. Fidelity small cap has a Sharpe ratio of 0.5 and expected return of 20%. Which fund should a risk-averse investor prefer if he/she likes to construct a portfolio using the risk-free and one of the funds?
A) Fidelity small cap
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B) Fidelity large cap
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C) Allocate 50% to each funds
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D) Only risk free asset
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E) None of the above
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