As the manager of Radboud Investments, LLC you are thinking of increasing your private investments. You already have a diversified portfolio containing a lot of stocks. Furthermore, the expected rate of return on the market portfolio is 8% and the risk free rate is 4% Stocks Alpha % Beta Standard deviation GOOGLE 0.5 1.1 30% LUFTHANSA 0.2 1.8 35% KLM 0.1 2.0 40% Select the correct answer (a)LUFTHANSA because its Sharpe Ratio is the largest (b)Google because its Treynor ratio is the largest (c)LUFTHANSA because its Treynor Ratio is the largest (d)Google because its Sharpe ratio is the largest
As the manager of Radboud Investments, LLC you are thinking of increasing your private investments. You already have a diversified portfolio containing a lot of stocks. Furthermore, the expected rate of return on the market portfolio is 8% and the risk free rate is 4% Stocks Alpha % Beta Standard deviation GOOGLE 0.5 1.1 30% LUFTHANSA 0.2 1.8 35% KLM 0.1 2.0 40% Select the correct answer (a)LUFTHANSA because its Sharpe Ratio is the largest (b)Google because its Treynor ratio is the largest (c)LUFTHANSA because its Treynor Ratio is the largest (d)Google because its Sharpe ratio is the largest
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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As the manager of Radboud Investments, LLC you are thinking of increasing your private investments. You already have a diversified portfolio containing a lot of stocks. Furthermore, the expected
Stocks | Alpha % | Beta | Standard deviation |
0.5 | 1.1 | 30% | |
LUFTHANSA | 0.2 | 1.8 | 35% |
KLM | 0.1 | 2.0 | 40% |
Select the correct answer
(a)LUFTHANSA because its Sharpe Ratio is the largest
(b)Google because its Treynor ratio is the largest
(c)LUFTHANSA because its Treynor Ratio is the largest
(d)Google because its Sharpe ratio is the largest
(e)KLM because its Treynor Ratio is the largest
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