An analyst is evaluating the performance of a portfolio of Mexican equities that is benchmarked to the IPC Index. The analyst collects the information about the portfolio and the benchmark index, shown below:

Expected return of the portfolio 8.7%
Volatility of returns of the portfolio 12.0%
Expected return of the IPC 4.0%
Volatility of returns of the IPC 8.7%
Risk-free rate of return 2.0%
Beta of portfolio relative to IPC 1.4%

What is the Sharpe ratio of this portfolio?

Expected return of the portfolio	8.7%
Volatility of returns of the portfolio	12.0%
Expected return of the IPC	4.0%
Volatility of returns of the IPC	8.7%
Risk-free rate of return	2.0%
Beta of portfolio relative to IPC	1.4%

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Financial Risk Manager Part 1