Which one of the following values would be the most preferable as a Sharpe ratio?
A)−1.11
B)−.89
C)0
D).10
E)1.02

Question

Quizplus · Accepted Answer

The Sharpe ratio measures the excess return (in this case, over a risk-free rate) per unit of risk. A Sharpe ratio above 1 is generally considered good, while a negative Sharpe ratio indicates that the investment is underperforming. Choice E has a Sharpe ratio of 1.02, indicating that the investment has a strong risk-adjusted performance.

Which One of the Following Values Would Be the Most