In: Finance
1
a. Suppose you are holding stock A and there are three possible outcomes. Outcome 1 happens with 30% probability and -20% return. Outcome 2 happens with 35% probability and 20 return. Outcome 3 happens with 35% probability and 30% return. What is the Sharpe Ratio of stock A?
0.212 | ||
0.267 | ||
1.154 | ||
0.547 |
b.
At the beginning of the month, you sell short 200 shares of Wells Fargo that are currently selling at $45 per share. One month later you cover your short position at $52 per shares. During the month, Wells Fargo issued $2 dividend per share. What is you return during this month?
0.111 | ||
0.200 | ||
-0.200 | ||
-0.111 | ||
-0.156 |