CFA Level 2
Portfolio Management

Calculating the Sharpe Ratio for an Investment Portfolio

Easy Performance Evaluation Risk-adjusted Measures

Consider an investment portfolio with the following characteristics over the past year: the portfolio generated a return of 12%, while the risk-free rate was 3%. The portfolio's standard deviation of returns is 15%. What is the Sharpe ratio of this portfolio, and which of the following options correctly describes its performance in terms of risk-adjusted returns?

Hint

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