Appropriate for the DOCH portfolio

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Reference no: EM133674383

Question

One year has passed since DOCH Advisors first started operations. Their overall equity portfolio has returned 28.2% versus a return of 22.4% for the JSE All-share index. The standard deviation of the JSE All-share index is 2%, and Julie Kadzo, a practicing financial analyst has estimated the standard deviation of DOCH Advisors' equity portfolio at 4%. The portfolio has a beta of 1.35; the risk-free rate is 4%.

A major DOCH client is attempting to evaluate the relative performance of the DOCH equity fund. The client is unsure whether the Sharpe measure or the Treynor measure is appropriate for the DOCH portfolio.

Reference no: EM133674383

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