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If the risk-free rate is 5.5 percent, which of these portfolios has the highest reward-to-risk ratio? Show your work. Portfilio 1 Security Amount Invested Expected
If the risk-free rate is 5.5 percent, which of these portfolios has the highest reward-to-risk ratio? Show your work.
Portfilio 1 | |||
Security | Amount Invested | Expected Return | Beta |
Security A | $4000 | 9% | .80 |
Security B | $5000 | 12% | 1.15 |
Security C | $12000 | 14% | .95 |
Security D | $8000 | 15% | 1.23 |
Portfolio 2 | |||
Security A | $3000 | 16% | 1.22 |
Security B | $11000 | 13% | 1.54 |
Security C | $9000 | 8% | .87 |
Security D | $6000 | 11% | .81 |
Portfolio 3 | |||
Security A | $15000 | 10% | 1.72 |
Security B | $12000 | 9% | .81 |
Security C | $3000 | 12% | .72 |
Security D | $2000 | 15% | 1.54 |
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