Question

HNW Advisors are based in California have averaged monthly return of 2.5% with a monthly volatility of 14% over the last year. During the same time period, the S&P500 has averaged a daily return of 0.09% with a daily volatility of 0.95%. We also know that the 1 year LIBOR rate is 1.0%, the HIBOR rate is 2.5%, the 1-year Treasury rate is 0.50% and the average California municipal bond rate is 3%.

Calculate the annualized return for both HNW Advisors and the S&P500

HNW Advisors S&P500

48.50% 22.92%

34.48% 25.22%

34.48% 19.55%

48.50% 15.02%

Calculate the annualized volatility for both HNW Advisors and the S&P500

HNW Advisors S&P500

48.50% 15.02%

34.48% 19.98%

34.48% 25.22%

48.50% 21.22%

Which risk free would we use to calculate the Sharpe Ratio?

LIBOR Rate

HIBOR Rate

Treasury Bill Rate

California Municipal Bond Rate

Calculate the Sharpe Ratio

HNW Advisors S&P500

0.70 0.66

0.68 1.49

0.68 1.65

Can you please attach working out

0.70 1.65