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Corporate Finance · End Term · 22 Dec 2024 · September 2024 term · Set QDB1

Question 32: A risky asset has a 12% expected rate of return and a 20…

Question 32

+4 marksNumerical answer

A risky asset has a 12% expected rate of return and a 20% standard deviation of the rate of return. If the Sharpe ratio of this risky asset is 0.8, then what is the prevailing risk-free rate of return (in %)?
**Note:**The answer is a single digit integer between 0-9.

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Correct answer: 4

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Question 32 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 22 Dec 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB3 22 Dec 2024). It carries 4 marks.

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