Question
Give detailed explanations and process for both of the following questions, choose the correct answers and show details: Portfolio Kappa has an average return of
Give detailed explanations and process for both of the following questions, choose the correct answers and show details:
Portfolio Kappa has an average return of 18% and standard deviation of returns (total) of 29%. The idiosyncratic standard deviation of returns of Kappa is 22%, and the risk-free rate is 3%. Calculate its Sharpe ratio to the nearest decimal.
Options:
-0.09 0.41 0.52 0.75 1.20
Then, using the correct answer you got from last question, calculate Famas measure for portfolio Kappa (to the nearest decimal). The average return of the market portfolio is 15%, and the standard deviation of the returns of the market portfolio is 17%.
Options:
-0.10 -0.05 0.05 0.13 0.26
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started