The Only Difference Between the Sharpe and Treynor Approaches Is

question 4

Multiple Choice

The only difference between the Sharpe and Treynor approaches is that the Treynor approach evaluates excess returns based on:

• A)total risk.
• B)unsystematic risk.
• C)systematic risk.
• D)None of the above

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Definitions:

Four Humors

An ancient theory suggesting that human behavior and health are governed by a balance of four bodily fluids: blood, phlegm, black bile, and yellow bile.

Yellow Bile

An ancient bodily fluid concept, theorized to be one of the four bodily humors associated with a choleric temperament.

Phlegm

A thick, viscous substance produced by the mucous membranes of the respiratory tract, often associated with colds and other illnesses.

Behaviorism

A theory in psychology that emphasizes the importance of observable behaviors rather than internal processes such as thoughts and emotions.