The mean and standard deviation (SD)of monthly returns,over a given period of time,for the stock markets of two countries,X and Y are: $$\begin{array} { c c c }
\text { Country } & \begin{array} { l }
\text { Mean } \
( \% )
\end{array} & \begin{array} { c }
\text { SD } \
( \% )
\end{array} \
\hline \text { X } & 1.57 & 4.87 \
\text { Y } & 1.92 & 7.64
\end{array}$$ Assuming that the monthly risk-free interest rate is 0.25%,the Sharpe performance measures,SHP(X)and SHP(Y),and the performance ranks,respectively,for X and Y are: (Don't round intermediate calculations and Round your final answers to 3 decimal places.)

Question

The mean and standard deviation (SD)of monthly returns,over a given period of time,for the stock markets of two countries,X and Y are: $$\begin{array} { c c c } 
\text { Country } & \begin{array} { l } 
\text { Mean } \
( \% )
\end{array} & \begin{array} { c } 
\text { SD } \
( \% )
\end{array} \
\hline \text { X } & 1.57 & 4.87 \
\text { Y } & 1.92 & 7.64
\end{array}$$ Assuming that the monthly risk-free interest rate is 0.25%,the Sharpe performance measures,SHP(X)and SHP(Y),and the performance ranks,respectively,for X and Y are: (Don't round intermediate calculations and Round your final answers to 3 decimal places.)

Quizplus · Accepted Answer

The Sharpe Ratio is calculated as (Mean Return - Risk-Free Rate) / Standard Deviation. For X: (1.57 - 0.25) / 4.87 = 0.271. For Y: (1.92 - 0.25) / 7.64 = 0.219. Higher Sharpe Ratio indicates better risk-adjusted return, so X ranks 1st and Y ranks 2nd.

The Mean and Standard Deviation (SD)of Monthly Returns,over a Given