Calculating the Sharpe Ratio for John's Fund

John is a portfolio manager at a wealth management firm. Over the last two years, he has been managing a fund with a return of 12% and a standard deviation of 8%. In comparison, the benchmark index for the same period has returned 9% with a standard deviation of 5%. John is interested in evaluating the risk-adjusted performance of his fund using the Sharpe Ratio.

The Sharpe Ratio is calculated as the excess return of the portfolio over the risk-free rate divided by the standard deviation of the portfolio. Assuming the risk-free rate is 2%, what is the Sharpe Ratio for John's fund?