Which of the Following Performance Measures Is Best Used to Analyze

question 52

Multiple Choice

Which of the following performance measures is best used to analyze a portfolio for possible inclusion in a master portfolio?
I. Treynor ratio
II. Sharpe ratio
III. Jensen's alpha

• A) III only
• B) I and III only
• C) II and III only
• D) I only
• E) I, II, and III

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Definitions:

Accounting Cycle

The process of recording and processing all financial transactions of a company, from when the transaction occurs, to its representation on the financial statements.

Ledger

A comprehensive collection of a company's financial accounts.

Trial Balance

A Trial Balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure that total debits equal total credits.

Financial Statements

Reports that show the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.