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Portfolio Sharpe ratio: portfolio return 14%, risk-free 6%, portfolio σ 16%. Sharpe ratio equals:
A0.40
B0.50
C0.88
D1.00
Answer & Solution
Correct answer: B. 0.50
1. Identify what the question asks: this concept maps to sharpeexample (§11).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (B).
_Source: ICAI BoS CA Final Paper 2, Ch 6 "Portfolio Management"_
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