n NISM Certifications
V-A NISM Series V-A
Medium

Return from a fund is 9%, the risk-free rate is 5%, the standard deviation is 3 & Beta is 1.6. What will be the NUMERATOR for calculating the Sharpe ratio?

Practice question from NISM Series V A - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    3

  2. B

    6

  3. C

    1.6

  4. 4

    Correct answer

Why this is the answer

The Sharpe Ratio is calculated as: (Return Earned - Risk-free Return) / Standard Deviation

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