Which of the Following Performance Measures Requires a Correlation Coefficient

question 66

Multiple Choice

Which of the following performance measures requires a correlation coefficient to calculate the performance measure for a new portfolio of two or more assets?
I. Treynor ratio
II. Sharpe ratio
III. Jensen's alpha

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

---

Definitions:

Price Inelastic

A situation in which the demand for a product does not change significantly in response to a change in its price.

Quantity Demanded

The total amount of a product that consumers are willing and able to purchase at a specific price in a given time period.

Electricity

A form of energy resulting from the existence of charged particles, commonly used for power and lighting.

Quantity Demanded

represents the total amount of a product or service consumers are willing and able to purchase at a given price level, within a specific time period.