Asset a has an expected return of 15 and a sharpe ratio of, Ask an Expert

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Asset A has an expected return of 15% and a Sharpe ratio of .4. Asset B has an expected return of 20% and a Sharpe ratio of .3. A risk-averse investor would prefer a portfolio using the risk-free asset and _______.

A) asset A

B) asset B

C) no risky asset

D) can't tell from the data given

The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of .8 to offer a rate of return of 12 percent, then you should __________.

A) buy stock X because it is overpriced

B) buy stock X because it is underpriced

C) sell short stock X because it is overpriced

D) sell short stock X because it is underpriced

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M9725248

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