Portfolio A has a return of 8% and a standard deviation of 10%.Portfolio B has a return of 12% and a standard deviation of 15%.If the risk-free rate is 4%,portfolio A has the highest Sharpe index.

Name: Portfolio A has a return of 8% and a standard deviation of 10%.Portfolio B has a return of 12% and a standard deviation of 15%.If the risk-free rate is 4%,portfolio A has the highest Sharpe index.
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Question

Quizplus · Accepted Answer

Using the Sharpe index,equation 20.11， we can calculate the index for both portfolios.

Portfolio a Has a Return of 8% and a Standard