The following table provides information for the mean value and standard deviation of return for four different stocks. STOCK Mean Return Standard Deviation A B 17% 20% 16% 19% Risk-free rate= 5% 11% 16% 10% 11% Which of these four stocks is preferable based on the Sharpe ratio? OA Stock B B. Stock A OC Stock D

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter3: Risk And Return: Part Ii
Section: Chapter Questions
Problem 1P: The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market...
icon
Related questions
Question

Ef 499.

The following table provides information for the mean value and standard deviation of return for four different stocks.
STOCK
Mean Return
Standard Deviation
C
17%
20%
16%
19%
Risk-free rate= 5%
11%
16%
10%
11%
Which of these four stocks is preferable based on the Sharpe ratio?
OA Stock B
OB. Stock A
OC. Stock D
Transcribed Image Text:The following table provides information for the mean value and standard deviation of return for four different stocks. STOCK Mean Return Standard Deviation C 17% 20% 16% 19% Risk-free rate= 5% 11% 16% 10% 11% Which of these four stocks is preferable based on the Sharpe ratio? OA Stock B OB. Stock A OC. Stock D
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Investment in Stocks
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT