The reward-to-volatility (Sharpe) ratio for the equity fund. Introduction: Reward-to-Volatility ratio is also called as Sharpe ratio. The ratio is useful when a risk premium on portfolio is to be compared with the total amount of the portfolio. The ratio can be calculated as follows: Sharpe ratio or Reward-to-Volatility ratio= R P -R F σ p

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Chapter 6, Problem 9CP

Summary Introduction

To calculate: The reward-to-volatility (Sharpe) ratio for the equity fund.

Introduction:

Reward-to-Volatility ratio is also called as Sharpe ratio. The ratio is useful when a risk premium on portfolio is to be compared with the total amount of the portfolio. The ratio can be calculated as follows:

Sharpe ratio or Reward-to-Volatility ratio=RP-RFσp

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