Sharpe's Measure of Portfolio Performance Compares the Risk Premium on a Portfolio

question 43

Multiple Choice

Sharpe's measure of portfolio performance compares the risk premium on a portfolio to

• A) a broad- based market index such as the ASX 300 index.
• B) the portfolio's beta.
• C) the prevailing risk- free rate of return.
• D) the portfolio's standard deviation of return.

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Definitions:

Survey

A research method used for collecting data from a predefined group of respondents to gain information and insights on various topics of interest.

Random Variable

A variable whose value is subject to variations due to chance.

Wait Time

The duration a person must wait before receiving a service or proceeding with an activity, often analyzed to improve efficiency in various operations.

Independent

Not influenced or controlled by others; in statistics, refers to variables that are not affected by other variables in the analysis.