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Basic Question 1 of 8
Which statement is false regarding Sharpe ratio?
B. Sharpe ratio cannot be applied to assets with negative beta.
C. If the investor does not have any other assets than the portfolio, then the use of total risk is appropriate in the Sharpe ratio.
A. Sharpe ratio can be used to rank portfolios.
B. Sharpe ratio cannot be applied to assets with negative beta.
C. If the investor does not have any other assets than the portfolio, then the use of total risk is appropriate in the Sharpe ratio.
User Contributed Comments 2
| User | Comment |
|---|---|
| michlam14 | treynor ratio cannot be applied to assets with neg beta |
| chcarnes | Sharpe uses standard deviation |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
calculate and interpret the Sharpe ratio, Treynor ratio, M2, and Jensen's alpha
CFA® 2025 Level I Curriculum, Volume 2, Module 2.