Calculate Sharpe's measure of performance for Beech Lake Discord Group.

Question

Quizplus · Accepted Answer

Sharpe's measure of performance is calculated as the ratio of the excess return to the standard deviation of the return. The excess return is the return on the investment minus the risk-free rate. The standard deviation of the return is a measure of the volatility of the investment.The Sharpe ratio for Beech Lake Discord Group is calculated as follows:Sharpe ratio = (Return - Risk-free rate) / Standard deviation of return= (10% - 1%) / 2%= 4.5Therefore, the Sharpe ratio for Beech Lake Discord Group is 4.5, which is closest to 44.00%.

Calculate Sharpe's Measure of Performance for Beech Lake Discord Group