Which of the Following Measures Should Be Used to Determine

question 65

Multiple Choice

Which of the following measures should be used to determine if a security should be included in a master portfolio?
I. Sharpe ratio
II. Treynor ratio
III. Jensen's alpha

• A)I only
• B)II only
• C)III only
• D)I and II only
• E)II and III only

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Definitions:

Liquidity Ratios

Financial metrics used to determine an organization's ability to pay off its short-term debts with its liquid assets.

Exchange Rates

The value of one currency for the purpose of conversion to another, influencing international trade and investment.

Consolidated Financial Statements

Consolidated Financial Statements are financial reports that combine the financial position, results of operations, and cash flows of a parent company and its subsidiaries into one document.

Profitability Ratios

Financial metrics that are used to assess a business's ability to generate earnings in comparison to its expenses and other relevant costs incurred during a specific period of time.