The Sharpe Ratio Is Considered to Be a Good Measure

question 55

Multiple Choice

The Sharpe Ratio is considered to be a good measure for well diversified portfolios because:

• A) The most of the total risk in the portfolio is systemic risk
• B) The beta estimate is unambiguous.
• C) It used by mutual fund managers.
• D) Unsystemic risk is of little worry in correctly diversified portfolios.
• E) Well diversified portfolios have a high R-Squared correlation.

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Definitions:

Schizophrenia

An intense mental health disorder distinguished by anomalies in reasoning, sensing, emotions, language use, self-awareness, and actions.

Dopamine Receptors

Protein molecules in the brain's cells to which dopamine binds, playing crucial roles in regulating mood, motivation, and movement.

Schizophrenia

A chronic mental health condition characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior.

Frontal Lobes

The areas of the brain located at the front part of the cerebral cortex, associated with decision making, problem solving, and control of behavior and emotions.