Which of the Following Performance Measures Is Best Used to Analyze

question 103

Multiple Choice

Which of the following performance measures is best used to analyze a well diversified 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) II only
• E) I, II, and III

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Definitions:

Marginal Revenue

The income boost obtained through the sale of one extra unit of a product or service.

Pure Competition

A market structure characterized by an extremely high level of competition, where no single buyer or seller can influence the market price.

Advertising

The activity or profession of producing advertisements for commercial products or services to influence consumer behavior.

Purely Competitive Industry

An industry structure where many firms offer a standardized product, entry and exit are easy, and no single supplier controls the market price.