Question 23
A risky asset has an expected rate of return of 12% and standard deviation of the rate of return of 20%. If the Sharpe ratio of this risky asset is 0.5, then what is the prevailing risk-free rate of return?
2%
4%
6%
8%
Question 23: A risky asset has an expected rate of return of 12% and …
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Correct answer
2%
Question 23 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 13 Apr 2025, in the January 2025 term (IIT M IMPROVEMENT AN EXAM QIM3 13 Apr 2025). It carries 3 marks.
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