The Sharpe Measure of Portfolio Performance Divides the Portfolio's Risk

question 45

True/False

The Sharpe measure of portfolio performance divides the portfolio's risk premium by the portfolio's beta.

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Definitions:

Stock Return

The profit or loss made on an investment in stock, usually expressed as a percentage of the purchase price.

Slope

The measure of the steepness and direction of a line, representing the rate of change of a function.

Simple Regression

A statistical method for quantifying the relationship between a single independent variable and a single dependent variable.

Intercept

In statistics and mathematics, the point at which a line crosses the y-axis in a graph, representing the value of the dependent variable when the independent variable is zero.