How Is the Sharpe Ratio Defined as It Applies to Security

question 26

Multiple Choice

How is the Sharpe ratio defined as it applies to security returns?

• A)Average return / Risk premium
• B)Standard deviation / Risk premium
• C)Average return / Standard deviation
• D)Risk premium / Average return
• E)Risk premium / Standard deviation

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Definitions:

Material Requirements Planning

An inventory management system that determines the quantity and timing of raw materials needed for production to meet demand while minimizing stock levels.

Time And Motion Studies

The analysis of work processes to increase efficiency by reducing wasted time and motion.

Interchangeable Parts

Components that are, for practical purposes, identical. They are made to specifications that ensure they are so nearly identical that they will fit into any device of the same type.

Operations Management

The aspect of management dedicated to the design, administration, and supervision of the manufacturing process, along with the modification of business operations in the generation of products or services.