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What is the Sharpe Ratio of an equity fund with an expected risk premium of 8%...

What is the Sharpe Ratio of an equity fund with an expected risk premium of 8% and a standard deviation of 18%? round your answer to two decimal places Answer:

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Answer:

Sharpe ratio = (Return of the portfolio - Risk free rate) / Standard deviation of the portfolio's excess return
That is: Sharpe Ratio=​(Rp​−Rf​​) / σp
where, Rp​−Rf​​ is known as the risk premium

Therefore, Sharpe ratio = 8 / 18 = 0.44

A sharpe ratio greater than 1 is considered as good and acceptable and less than 1 is considered bad

jeff jeffy answered 2 years ago
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