- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 8. The Sharpe Measure of Risk-Adjusted Performance

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**CFA Practice Question**

The mean return in 2011 for a stock mutual fund of large companies was 7.2% and the mean return for a risk-free bond was 1.0 %. If the Sharpe measure for the mutual fund is 0.50, what is the standard deviation or risk of the stock mutual fund?

A. 3.2

B. 12.4

C. 16.4

**Explanation:**(7.2 - 1 ) / 0.5 = 12.4

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