SCENARIO 20-4
A stock portfolio has the following returns under the market conditions listed below.

-Referring to Scenario 20-4,what is the return to risk ratio?
A)0.64
B)1.08
C)1.18
D)2.00

Question

SCENARIO 20-4
A stock portfolio has the following returns under the market conditions listed below.

-Referring to Scenario 20-4,what is the return to risk ratio?
A)0.64 
B)1.08 
C)1.18 
D)2.00

Quizplus · Accepted Answer

The return to risk ratio is calculated by dividing the expected return by the standard deviation. In this case, the expected return is 12% and the standard deviation is 18.75%. Therefore, the return to risk ratio is 12% / 18.75% = 0.64.

SCENARIO 20-4 A Stock Portfolio Has the Following Returns Under the Market