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What is reward-to-volatility ratio for the equity fund

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Reference no: EM132945479

Question - You manage an equity fund with an expected risk premium of 10% and an expected standard deviation of 14%. The rate on Treasury bills is 6%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund.

a) What are the expected return and standard deviation of return on your client's portfolio?

b) What is the reward-to-volatility (Sharpe) ratio for the equity fund?

Reference no: EM132945479

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