# Suppose a portfolio is expected to earn 15 while you

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Suppose a portfolio is expected to earn 15% while you expect the market to return 14%. Thestandard deviation of your portfolio is 20%. The current risk-free rate is 4%. The Sharpe Ratiofor your portfolio is ____________0.750.500.550.05The excess of the interest rate over the inflation rate is called the Input Field 1 of 1 real unavailablecorrectrealinterest rate.The growth rate of purchasing power derived from an investment.The portfolio choice among broad investment classes is known as Input Field 1 of 1 capital unavailableincorrectassetallocation.
In scenario analysis, the HPR is calculated by computing:arithmetic average return over the considered periodweighted-average of returns in all possible outcomesdollar-weighted returngeomentric average return over the considered periodThe overall portfolio composed of the risk-free asset and the risky portfolio is called the Input Field 1 of 1complete unavailable correctcompleteportfolio and it includes the entire investor's wealth.Which of the following statements is incorrect?
Since a Treasury Bond is default-free it is, by implication, risk-free as well.
Which of the following statements about risk-averse investors is correct?
True or false: Finding the available combinations of risk and return is the "technical" part ofcapital allocation; it deals only with the opportunities available to investors.TrueFalseRationale:available combination of risk and return is the technical partThe Sharpe ratio of a portfolio isthe portfolio risk premium divided by the standard deviation of the portfolio's excess returnthe market risk premium divided by the standard deviation of the portfolio's excess returnthe portfolio return divided by the standard deviation of the market's excess returnthe portfolio's return divided by the standard deviation of the portfolio's excess returnTrue or false: The capital allocation line is the plot of all the risk-return combinations availableto investors.TrueFalseRationale:The capital allocation line is the plot of all the risk-return combinations available to investors.A simple strategy to control portfolio risk is to specify the fraction of the portfolio invested in broad assetclasses such as stocks, bonds, and safe assets such as Treasury bills. This aspect of portfolio managementis called Input Field 1 of 2 asset unavailable correctassetInput Field 2 of 2 allocationunavailable correctallocation.

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Term
Fall
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Stock exchange