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

question 8

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

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Definitions:

Chemical Bonds

The attraction between atoms that allows the formation of chemical substances containing two or more atoms.

Contact Digestion

The process by which nutrients are broken down in the small intestine where enzymes directly act on the food.

Brush Border

Epithelial surface consisting of microvilli.

Segmental Contractions

Segmental contractions refer to the rhythmic contraction and relaxation of segments of the intestines, aiding in the mixing and absorption of nutrients.