Question

What does a higher Sharpe's Ratio indicate in the context of mutual fund performance?

a.

Lower return for higher risk

b.

Better portfolio return relative to the degree of investment risk

c.

Lower variability of returns

d.

Negative return for lower risk

Answer: (b).Better portfolio return relative to the degree of investment risk Explanation:A higher Sharpe's Ratio indicates better portfolio return relative to the degree of investment risk taken by the investor in a particular portfolio.

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Q. What does a higher Sharpe's Ratio indicate in the context of mutual fund performance?

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