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:

Assets

Resources owned by a person or business that have economic value or expected future benefit.

Liabilities

Financial obligations or debts owed by a person or company to others.

Taxation Principle

The guidelines governing how taxes should be levied on individuals and businesses in a fair and efficient manner.

Tax Revenue

The income that is gained by governments through taxation from individuals and businesses.