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Portfolio of two assets using vba code9/22/2023 ![]() Step 6: Finally, the Sharpe ratio can be annualized by multiplying the above ratio by the square root of 252 as shown below. Step 5: Now, the Sharpe ratio is calculated by dividing the excess rate of return of the portfolio (step 3) by the standard deviation of the portfolio return (step 4). Step 4: Now, the standard deviation of the daily return of the portfolio is calculated which is denoted by ơ p. Step 3: Now, the excess rate of return of the portfolio is computed by deducting the risk-free rate of return (step 2) from the rate of return of the portfolio (step 1) as shown below. ![]() Step 2: Now, the daily yield of a 10-year government security bond is collected to compute the risk-free rate of return which is denoted by R f. Then the average of all the daily return is determined which is denoted as R p. ![]() The rate of return is calculated based on net asset value at the beginning of the period and at the end of the period. Step 1: Firstly, the daily rate of return of the concerned portfolio is collected over a substantial period of time i.e. ![]()
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