Questions
Single choice
The Sharpe ratio
Options
A.measures the systematic (market) risk
B.measures the idiosyncratic (individual) stock risk
C.measures the marginal return for risk
D.measures the marginal propensity to consume
E.measures risk of a portfolio
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Step-by-Step Analysis
The question concerns the Sharpe ratio and what it measures.
Option A: 'measures the systematic (market) risk' — This is not accurate. The Sharpe ratio does not isolate market risk; it relates overall risk (as captured by total standard deviation) to excess return, not specifically the systematic compon......Login to view full explanationLog in for full answers
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