Niki Malones portfolio earned a return of 11.8% during the year just ended. The portfolios standard deviation of return was 14.1%. The risk-free rate is currently 6.2%. During the year, the return on the market portfolio was 9.0% and its standard deviation was 9.4%.

a) Calculate Sharpes measure for Niki Malones portfolio for the year just ended.

b) Compare the performance of Nikis portfolio found in part a to that of Hector Smiths portfolio, which has a Sharpes measure of 0.43. Which portfolio performed better? Why?

c) Calculate Sharpes measure for the market portfolio for the year just ended.

d) Use your findings in parts a and c to discuss the performance of Nikis portfolio rela- tive to the market during the year just ended.

Note writing on the computer