Question
In: Finance
You invest $100 in a risky asset with an expected rate of return of 0.13 and...
You invest $100 in a risky asset with an expected rate of return
of 0.13 and a standard deviation of 0.11 and a T-bill with a rate
of return of 0.03.
The slope of the capital allocation line formed with the risky
asset and the risk-free asset is equal to
Solutions
Expert Solution
Slope of CAL is Sharpe Ratio.
So, Sharpe Ratio = [E(rS) - rF] / 
S
= [0.13 - 0.03] / 0.11
= 0.10 / 0.11 = 0.91
jeff jeffy answered 2 years agoRelated Solutions
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