The Sharpe and Treynor Measures Tend to Be Consistent in Their

question 2

Multiple Choice

The Sharpe and Treynor Measures tend to be consistent in their ranking of portfolios when the portfolios:

• A)are poorly diversified.
• B)are properly diversified.
• C)contain only U.S. equity investments.
• D)none of the above

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Definitions:

Gross Profit

The difference between a company's sales revenue and its cost of goods sold, representing the profit made before accounting for operating expenses.

Special Order

A one-time customer order often involving unique specifications, which might not fit into the company's standard offerings.

Variable Cost

Costs that vary directly with the level of production or volume of output, such as raw materials and direct labor.

Fixed Cost

Fixed cost refers to a cost that does not change with the level of output or sales in the short term, such as rent, salaries, or loan payments.