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Basic Question 2 of 11
The biggest problem of using the Sharpe ratio to measure the performance of alternative investments is: A. It assumes a normally distributed returns but the returns profiles of alternative investments are not even symmetric.
B. It fails to include the correlation effect of alternative investments.
C. It fails to consider the impact of leverage.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe the performance appraisal of alternative investments
CFA® 2025 Level I Curriculum, Volume 5, Module 2.