Answer: 0.389

## Explanation The Sharpe ratio is calculated using the formula: \[\text{Sharpe Ratio} = \frac{E(R_p) - R_f}{\sigma_p}\] Where: - \(E(R_p)\) = Expected return on the portfolio = 6.6% - \(R_f\) = Risk-free rate of return = 1.5% - \(\sigma_p\) = Volatility of returns on the portfolio = 13.1% Substituting the values: \[\text{Sharpe Ratio} = \frac{6.6\% - 1.5\%}{13.1\%} = \frac{5.1\%}{13.1\%} = 0.389\] Therefore, the correct answer is **C. 0.389**. Note: The beta value (1.4) is not needed for calculating the Sharpe ratio, as it measures systematic risk relative to a benchmark, while the Sharpe ratio uses total portfolio volatility.

Author: LeetQuiz .