Which of the Following Is Not True About the Sharpe

question 62

Multiple Choice

Which of the following is not true about the Sharpe ratio?

• A) An estimate for the beta of the portfolio is not required.
• B) It penalizes a portfolio that is not diversified.
• C) It allows us to find the best portfolio on the efficient frontier.
• D) It is useful for measuring the performance of an individual asset.
• E) All of the above are true about the Sharpe ratio.

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Definitions:

Cross-Price Elasticity

The responsiveness level of the quantity of a product needed when there's a fluctuation in the price of another product.

Cross-Price Elasticity

An assessment of how changes in the price of one good affect the demand for another good.

Complements

Goods that are often used together, where an increase in the demand for one leads to an increase in the demand for the other.

Cross-Price Elasticity

A measure of how the quantity demanded of one good changes in response to a price change of another good.