The Modigliani M2 Measure and the Treynor T2 Measure

question 58

Multiple Choice

The Modigliani M2 measure and the Treynor T2 measure

• A) are identical.
• B) are nearly identical and will rank portfolios the same way.
• C) are nearly identical, but might rank portfolios differently.
• D) are somewhat different; M2 can be used to rank portfolios, but T2 cannot.
• E) are somewhat different; T2 can be used to rank portfolios, but M2 cannot.

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Definitions:

Full Disclosure

Obligation to provide all relevant information and facts to the other party, particularly in financial transactions or legal agreements.

Unilateral Mistake

A misinterpretation or error made by one party in a contract, which does not usually affect the enforceability of the contract.

Ethical Rule

Guidelines or principles designed to govern behaviors within specific professional fields or societal norms.

Termination of Offer

The revocation or withdrawal of a proposal by the offeror before it has been accepted by the offeree.