Consider the following returns for two investments, A and B,
over the past four years:
Investment 1:
4%
14%
-4%
7%
Investment 2:
13%
22%
-13%
20%
a-1. Calculate the mean for each
investment. (Round your answers
to 2 decimal places.)
a-2. Which investment provides the higher
return
b-1. Calculate the standard deviation for
each investment. (Round
your answers to 2 decimal
places.)
b-2. Which investment provides less
risk?
c-1. Given a risk-free rate of 1.4%,
calculate the Sharpe ratio for each investment. (Round
your answers to 2 decimal places.)
c-2. Which investment has performed
better?