The Sharpe's Measure for Jane Smith's Investment Portfolio Is 0

question 31

Multiple Choice

The Sharpe's measure for Jane Smith's investment portfolio is 0.40, while the Sharpe's measure for the market is 0.30. This information suggests that Smith's portfolio

• A) is overly diversified, and some securities should be sold to bring the portfolio in line with the market.
• B) exhibits superior performance because its risk premium per unit of risk is above that of the market.
• C) is inadequately diversified, and more securities should be added to the portfolio in order to bring it in line with the market.
• D) exhibits poor performance because its risk premium per unit of risk is below that of the market.

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Definitions:

Class Statuses

Different levels of social hierarchy or prestige within society that are determined by factors such as wealth, occupation, education, and family background.

Everyday Class Consciousness

The awareness of one's own social class and that of others in daily life, affecting interactions and perceptions.

Class Statuses

The ranking or hierarchy of social positions or statuses within a society based on factors like wealth, education, and occupation.

Social Mobility

The capacity for individuals or groups to move within the social hierarchy through changes in income, education, employment, or wealth.