Question
In: Finance
Sharpe ratio of portfolio A and B are 0.40 and 0.52 respectively. Therefore, CAL(A) is _________...
Sharpe ratio of portfolio A and B are 0.40 and 0.52
respectively. Therefore, CAL(A) is _________ than CAL(B).
Select one:
a. Larger
b. Steeper
c. Smaller
d. Flatter
Solutions
Expert Solution
Answer-
The correct Option is d. Flatter
As the sharpe ratio is lower the Capital Allocation Line (CAL) is flatter. As Sharpe ratio is higher the more steeper the CAL. As sharpe ratio of A (0.40) is lower than B ( 0.52) therefore it has flatter CAL.
The other options a, b and c are incorrect.
jeff jeffy answered 2 years agoRelated Solutions
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ratio of household portfolio annual returns for different brackets
of the distribution of net wealth in Sweden between 1999 and 2007
(standard errors are not reported). The reported Sharpe ratio of a
household portfolio is equal to the expected return of the
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when comparing two portfolios, the one with...
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