A More Recent Adjustment to the Sharpe Measurement for Portfolio

question 96

Multiple Choice

A more recent adjustment to the Sharpe measurement for portfolio evaluation is

• A) To divide the portfolio risk premium by total risk rather than the portfolio's beta.
• B) To divide the portfolio risk premium by standard deviation rather than the portfolio's beta.
• C) To divide the portfolio risk premium by the excess portfolio return rather than total risk.
• D) To divide the excess portfolio return by the portfolio's standard deviation.
• E) To divide the excess portfolio return by the portfolio's beta.

Grasp the relationship between external validity and generalizability in research.

Comprehend the characteristics of scientific theories and the principle of parsimony.

Identify different types of measures used in psychological experiments.

Formulate hypothesis based on observed patterns and understand hypothesis testing.

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Definitions:

Competitive Advantage

Refers to the unique edge a business has over its competitors, allowing it to generate greater sales or margins and/or retain more customers.

Strategic Management Process

A comprehensive approach to planning, executing, monitoring, and adapting strategies that guide an organization in maintaining competitive advantage.

Strategy

A comprehensive plan guiding resource allocation to achieve long-term organization goals.

Lack of Participation Error

A situation in decision-making processes where not all relevant parties are included, which can lead to suboptimal outcomes and reduced acceptance of decisions.