Final answer:
The Sharpe ratio measures risk-adjusted return and compares the excess return of an investment to its volatility.
Step-by-step explanation:
The Sharpe ratio is a measure of risk-adjusted return that compares the excess return of an investment to its volatility. It is calculated by subtracting the risk-free rate of return from the expected portfolio return, and then dividing this by the standard deviation of the portfolio return.
The 'best feasible CAL' refers to the best feasible Capital Allocation Line, which represents a combination of risky assets and a risk-free asset that generates the highest Sharpe ratio.
To calculate the Sharpe ratio, you would need the expected return and standard deviation of the portfolio, as well as the risk-free rate of return.