Quantitative Methods - Quantitative Methods Section 2
11. The table below summarizes the performance data for three portfolios:
| Portfolio | Arithmetic mean return(%) | Variance of (%) |
| Portfolio A | 16.4% | 4.9% |
| Portfolio B | 12.6% | 3.5% |
| Portfolio C | 14.8% | 4.2% |
Given that the mean return on the risk-free asset is 10.5 percent, which portfolio is most likely to have the highest Sharpe ratio?
12. A distribution more peaked than the normal distribution is best described as being:
- Option : C
- Explanation : Leptokurtic describes a distribution that is more peaked than the normal distribution. Platykurtic is a distribution less peaked than a normal distribution. Mesokurtic is a distribution as peaked as the normal distribution.
- Option : C
- Explanation : A positively skewed distribution appears as if the right tail has been pulled away from the mean.
- Option : C
- Explanation : A positively skewed distribution has frequent small losses and a few large gains. A negatively skewed distribution has frequent small gains and a few large losses. A normal distribution is symmetrical.
15. Which of the following relationships best characterize a negatively skewed distribution?
- Option : A
- Explanation : For a negatively skewed distribution, the mean is less than the median, which is less than the mode.
