CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

Richard puts all his money, $100,000, in a mutual fund. Connor, who has the same amount of equity, borrows another $100,000 (at a risk-free rate) and puts all the $200,000 in the same fund. Which portfolio is expected to have a higher Sharpe ratio?
A. Richard's
B. Connor's
C. They both have the same Sharpe ratio.
Explanation: The leverage does not affect the portfolio's Sharpe ratio.

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