#033easyStatistics
Sharpe Ratio Computation
Problem
Compute the Sharpe Ratio of a portfolio given the following period returns and risk-free rate. Use the population standard deviation of returns.
Given data:
- Risk-free rate:
rf = 0.02 - Returns:
[0.05, 0.02, 0.03, 0.04, 0.01]
What is the Sharpe Ratio?
Enter your answer as a decimal rounded to 4 decimal places.
Constraints
- •2 ≤ N ≤ 10000 (number of return observations)
- •-1.0 ≤ returns[i] ≤ 1.0
- •0.0 ≤ rf ≤ 0.1 (risk-free rate per period)
- •Standard deviation of returns will be > 0
- •Use population standard deviation (divide by N)
- •Output rounded to 4 decimal places
Loading interactive editor…