Define and Discuss the Sharpe, Treynor, and Jensen Measures of Portfolio

question 55

Essay

Define and discuss the Sharpe, Treynor, and Jensen measures of portfolio performance evaluation and the situations in which each measure is the most appropriate measure.

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Definitions:

Marginal Revenue Product

The extra income obtained through the use of an additional unit of a resource, for example, capital or labor.

Wage Rates

The amount of money paid to an employee by an employer for a unit of time worked or for a certain amount of work completed.

Labor Demand

Denotes the quantity of labor that employers are willing to hire at a given wage rate in a given time period.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied changes by an infinite amount in response to any change in price; most common in theoretical models.