A Disadvantage of the Treynor and Sharpe Measures Is That

question 39

Multiple Choice

A disadvantage of the Treynor and Sharpe measures is that

• A) They produce absolute performance rankings.
• B) The beta and standard deviation are static.
• C) They are both difficult to compute.
• D) They produce relative performance rankings.
• E) They give very different measurements for well-diversified portfolios.

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Definitions:

Nonaromatic

Refers to organic compounds that do not fulfill the criteria for aromaticity, lacking a conjugated system of pi electrons.

Phenanthrene

A polycyclic aromatic hydrocarbon made up of three fused benzene rings, found in coal tar and crude oil.

Carbon Tetrachloride

A colorless liquid with the formula CCl4, historically used as a cleaning agent, fire extinguisher, and refrigerant, now recognized as a carcinogen.

Pyridine

A basic heterocyclic organic compound with the formula C5H5N, featuring a ring structure similar to benzene but with one methine group (\(CH\)) replaced by a nitrogen atom.