The Sharpe Ratio is calculated as the excess return of the portfolio (or market) over the risk-free rate, divided by its standard deviation.

For the Portfolio:

• Average return ($R_p$) = $32%$
• Standard deviation ($\sigma_p$) = $40%$
• Risk-free rate (T-Bill rate) = $6%$ $\text{Sharpe Ratio (Portfolio)} = \frac{32\% - 6\%}{40\%} = \frac{26\%}{40\%} = 0.65$

For the Market:

• Average return ($R_m$) = $25%$
• Standard deviation ($\sigma_m$) = $30%$
• Risk-free rate (T-Bill rate) = $6%$ $\text{Sharpe Ratio (Market)} = \frac{25\% - 6\%}{30\%} = \frac{19\%}{30\%} \approx 0.6333$

Thus, the Sharpe ratios are 0.65 and 0.63, matching Option A.