Chartered Investment Manager (CIM) Practice Exam · Question
A portfolio manager achieved a portfolio return of 12% over the last year. During the same period, the risk-free rate was 2%, and the standard deviation of the portfolio's returns was 10%. The market return for the period was 10%. Calculate the portfolio's Sharpe Ratio.
The Sharpe Ratio is calculated as (Portfolio Return - Risk-Free Rate) / Portfolio Standard Deviation. In this case, (12% - 2%) / 10% = 10% / 10% = 1.00.
Start free practice for Chartered Investment Manager (CIM) Practice Exam
399 questions · no signup required · 40 free questions per day
Question: A portfolio manager achieved a portfolio return of 12% over the last year. During the same period, the risk-free rate was 2%, and the standard deviation of the portfolio's returns was 10%. The market return for the period was 10%. Calculate the portfolio's Sharpe Ratio.
Answer options: ✅ 1.00
- 1.20
- 0.80
- 1.10
Correct answer: 1.00
Explanation: The Sharpe Ratio is calculated as (Portfolio Return - Risk-Free Rate) / Portfolio Standard Deviation. In this case, (12% - 2%) / 10% = 10% / 10% = 1.00.
Start free practice for Chartered Investment Manager (CIM) Practice Exam
399 questions · no signup required · 40 free questions per day
More about Chartered Investment Manager (CIM) Practice Exam
Related Questions
- Strategic asset allocation is:
- Modern Portfolio Theory introduced by:
- A client approaches you, a CIM-credentialed portfolio manager, wanting to understand the true cost of their mu
- Duration measures bond sensitivity to:
- Which of the following is an example of an alternative investment?
- An investment advisor's foremost duty to a client is to act in their best interest, placing the client's inter
More for Chartered Investment Manager (CIM) Practice Exam candidates
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free Chartered Investment Manager (CIM) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.