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
To tackle the question, I’ll evaluate what the Sharpe ratio actually conveys and then judge each option against that meaning.
Option 1: 'measures the systematic (market) risk' — This is not correct. Systematic risk is captured by metrics like beta, which describe sensitivity to market movements, not by the Sharpe ratio. The Sharpe rat......Login to view full explanationLog in for full answers
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