Use the Table for the Question(s)below

question 66

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns,volatilities,and correlations:
-Which of the following statements is FALSE?

• A)The Sharpe ratio measures the ratio of volatility-to-reward provided by a portfolio.
• B)Borrowing money to invest in stocks is referred to as buying stocks on margin.
• C)The Sharpe ratio is the number of stand deviations the portfolio's return would have to fall to under-perform the risk-free investment.
• D)The slope of the line through a given portfolio is often referred to as the Sharpe ratio of the portfolio.

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Definitions:

Sum Certain

A specific, fixed amount of money that is clear and unambiguous in a legal agreement or financial transaction.

Shares of Stock

Units of ownership in a corporation, representing a portion of the corporation's capital.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer's sign.

Enforceable Contract

A valid contract that is legally recognized and that can be upheld in a court of law.