FIN680 Corporate Finance Portfolios

FIN 680 UArizona Global Campus Corporate Finance Portfolios

Based on the two portfolios you were assigned above, calculate the Sharpe ratio and the Treynor ratio for each portfolio.

In your post,

• Explain each ratio and how it is calculated.
• Show your calculations of each ratio.
• State which portfolio performed better.
• Explain when an investor should use each ratio to evaluate performance.

For the following discussion, you will use the following two portfolios from Table 1 below:

• Portfolios	Average Annual Return (%)	Standard Deviation (%)	βp	R2
  A	17.0	20.0	0.88	0.82
  B	19.0	17.8	0.57	0.57

  Note: The table shows the annual total returns for nine years for eight mutual funds. βp = the slope