Question 3What is the Sharpe ratio for portfolio B? Round off your answer to three digits after the decimal point, as in 1.234. ### Excess Returns Over the Risk-Free RateThe following table captures monthly excess returns over the risk-free rate for three portfolios: A, B, and M.| Month | A | B | M ||-------|--------|--------|--------|| 1 | 0.67 | 3.72 | -1.56 || 2 | 1.69 | 3.31 | -2.08 || 3 | 12.37 | 7.26 | 3.67 || 4 | 0.32 | 0.15 | -6.14 || 5 | 5.65 | 4.17 | -0.91 || 6 | -14.55 | -0.98 | -7.25 || 7 | -2.71 | -0.61 | -7.90 || 8 | 2.28 | 4.39 | 0.49 || 9 | -13.53 | -1.52 | -11.00 || 10 | 16.91 | 10.46 | 8.54 || 11 | 7.95 | 8.35 | 5.73 || 12 | -8.99 | 0.46 | -6.03 || 13 | 0.50 | 3.08 | -2.74 || 14 | -5.48 | 3.30 | -1.70 || 15 | -1.05 | 4.88 | 0.84 || 16 | 14.19 | 9.87 | 8.10 || 17 | 10.94 | 8.24 | 5.09 || 18 | 0.37 | 4.86 | 1.13 || 19 | 6.91 | 5.52 | 1.62 || 20 | 1.99 | 5

In this question, we are provided with Excess return over the risk-free rate and need to find out…

Month 12 84 SE 86 37 39 40 Excess Returns over the risk free rate M 0.67 3.72 -1.56 2 -2.08 1.69 3.31 12.37 3 7.26 3.67 4 0.32 0.15 6.14 S 3.65 4.17 -0.91 -14.55 -0.98 -7.25 -2.71 -0.61 -7.90 2.28 4.39 0.49 -13.53 -3.52 -11.00 16.91 10.46 8.64 7.05 8.53 5.71 8.99 0.46 -6.03 0.50 3.08 -2.74 -5.48 3.30 -1.70 -1.05 0.84 14.19 9.87 8.10 10.04 8.24 5.09 4.86 1.13 5.52 1.62 5.81 1.79 3.85 -1.19 7.93 5.50 0.71 7.90 5.08 5.86 1.73 5.56 1.22 3.25 -1.64 -1.68 5.19 1.21 6.03 1.80 2.20 -3.43 4.53 0.23 0.94 1.40 3.86 3.25 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 0.37 5.91 1.99 0.00 4.40 -2.62 5.74 7.49 3.04 -2.73 -5.60 3.57 1.54 -2.20 0.46 2.89 3.35 4.99 1.19 ET'S 5.07 7.32 7.10

Month 12 84 SE 86 37 39 40 Excess Returns over the risk free rate M 0.67 3.72 -1.56 2 -2.08 1.69 3.31 12.37 3 7.26 3.67 4 0.32 0.15 6.14 S 3.65 4.17 -0.91 -14.55 -0.98 -7.25 -2.71 -0.61 -7.90 2.28 4.39 0.49 -13.53 -3.52 -11.00 16.91 10.46 8.64 7.05 8.53 5.71 8.99 0.46 -6.03 0.50 3.08 -2.74 -5.48 3.30 -1.70 -1.05 0.84 14.19 9.87 8.10 10.04 8.24 5.09 4.86 1.13 5.52 1.62 5.81 1.79 3.85 -1.19 7.93 5.50 0.71 7.90 5.08 5.86 1.73 5.56 1.22 3.25 -1.64 -1.68 5.19 1.21 6.03 1.80 2.20 -3.43 4.53 0.23 0.94 1.40 3.86 3.25 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 0.37 5.91 1.99 0.00 4.40 -2.62 5.74 7.49 3.04 -2.73 -5.60 3.57 1.54 -2.20 0.46 2.89 3.35 4.99 1.19 ET'S 5.07 7.32 7.10

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 9PROB

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