Which One of the Following Is Probably the Best Measure

question 14

Multiple Choice

Which one of the following is probably the best measure of the performance of a well-diversified portfolio?

• A)Jensen's alpha
• B)Value-at-Risk
• C)Jensen-Treynor alpha
• D)Sharpe ratio
• E)Treynor ratio

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Definitions:

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.

Dollar Contribution Margin

The difference between total sales revenue and total variable costs, expressed in absolute currency terms.

Variable Cost

Costs that change in proportion to the level of production activity or volume, such as raw material costs and direct labor costs.