What is optimas sharpe ratio

Assignment Help Financial Management

Reference no: EM131521192

The Optima Mutual Fund has an expected return of 20.5 % and a volatility of 19.7 %. Optima claims that no other portfolio offers a higher Sharpe ratio. Suppose this claim is true, and the risk-free interest rate is 5.8 %.

a. What is Optima's Sharpe ratio? calculate.

b. If eBay's stock has a volatility of 36.2 % and an expected return of 9.4 %, what must be its correlation with the Optima Fund? calculate.

c. If the SubOptima Fund has a correlation of 85 % with the Optima Fund, what is the Sharpe ratio of the SubOptima Fund? calculate.

Reference no: EM131521192

Questions Cloud

Similarities between noble eightfold path and christianity : Do you see any similarities between the Noble Eightfold Path and Christianity? Did Jesus say anything similar to Buddha in this regard? Elaborate

Leading producers of smartphones : Apple and Samsung are often mentioned together, as they are both world leading producers of smartphones.

How is the role of the father different in the buddhist : For example, how is the role of the father different in the Buddhist and Christian versions of the story? Elaborate

Determine target market to which social media will cater : Determine the target market to which your social media site will cater. Recommend a marketing strategy to entice your chosen target market to join your site.

What is optimas sharpe ratio : The Optima Mutual Fund has an expected return of 20.5 % and a volatility of 19.7 %. What is Optima's Sharpe ratio? calculate.

Trends in the labor force participation : Write about the trends in the labor force participation after world war 2. What has caused the trends? Explain the rise in women's labor force participation.

Calculate the amount paid for goodwill : On March 31, 2012, Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $34,000,000 in cash.

What is the expected return of your investment : If the risk-free interest rate is 4 % and the market expected return is 8 % what is the expected return of your investment?

Regulation of business relationships : What factors are relevant in an assessment of whether a company is insolvent and why is the issue of insolvency an important factor in regulation of business?

User Account

All Pages