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Questions stock Return Standard deviation Sharp Ratio A 10% 5% B 15% 25% C 5% 3% Calculate the sharp ratio for each stock using the
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stock | Return | Standard deviation | Sharp Ratio |
A | 10% | 5% |
|
B | 15% | 25% |
|
C | 5% | 3% |
|
- Calculate the sharp ratio for each stock using the above information, assume risk free rate is 3%.
- Based on your answer on A; Which stock would you prefer, and which stock you will avoid.
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