Supply Chain Mano Value Creation Assic PTS 1 6 What are co G How to calculate th

Question

Supply Chain Mano Value Creation Assic PTS 1 6 What are co G How to calculate the D Chapter 3 0 (2) Computing sharp × × × × × c ol ezto.mheducation.com/hm.tpx value 10.00 points Consider the following data for two investments, A and B Investment A: Investment B: 8and s-5 10 and s 7 . a-1. Which investment provides the higher retum? Investment A Investment B a-2. Which investment provides less risk? Investment A b 1 Given a risk-free rate of 2%, calculate the Sharpe ratio for each investment 2 decimal places.) Round your answers to it Investment B Sharpe Ratio .6 b-2. Which investment provides the higher reward per unit of risk? Investment A Investment B References eBook & Resources

Explanation / Answer

a1) Investment B has greater return

a2) Investment A has less risk

a3) Investment A sharpe ratio = (10-2)/7 = 1.14

Investment B sharpe ratio = (8-2)/5 = 1.2

a4) Investment B

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