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ou manage an equity fund with an expected risk premium of 13% and a standard deviation of 44%. the rate on treasury bills is 6.6%. your client chooses to invest $90,000 of her portfolio in your equity fund and $60,000 in a t-bill money market fund. what is the reward-to-volatility (sharpe) ratio for the equity fund?

Respuesta :

tutorconsortium127

The equities fund's reward-to-volatility (Sharpe) ratio is 0.2954.

What is equity fund?

  • According to the investment goal of the underlying mutual fund scheme, equity funds invest their assets in the stocks of various companies.
  • Due to their potential for long-term wealth generation, these funds make excellent investment choices for capital growth.
  • Equity funds come in many varieties, including those that focus on growth companies (which typically don't pay dividends), income funds (which hold firms that pay significant dividends), value stocks, large-cap stocks, mid-cap stocks, small-cap stocks, or mixes of these.
  • By collecting investor capital into a single fund and investing it into multiple enterprises, equity funds encourage investment.

Therefore,

Portfolio risk premium / Standard Deviation = Sharpe Ratio

13% / 44% = 0.2954

To learn more about equity fund, refer to:

https://brainly.com/question/22069020

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