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Basic Question 6 of 13
Which statement about the Sharpe ratio is false?
B. A portfolio with a Sharpe ratio of 0.8 is 2 times better than a portfolio with a Sharpe ratio of 0.4.
C. The Sharpe ratio for one stock can be different among different investors.
A. The Sharpe ratio cannot be applied to risk-free assets.
B. A portfolio with a Sharpe ratio of 0.8 is 2 times better than a portfolio with a Sharpe ratio of 0.4.
C. The Sharpe ratio for one stock can be different among different investors.
User Contributed Comments 4
| User | Comment |
|---|---|
| fredpat01 | Can someone explain why C is correct? |
| cosmos1994 | Different Investors have different portfolios hence different denominators |
| Konstantis | And different returns |
| davidt87 | historical sharpe ratio cant be different, but if youre using expected returns, then your expectations can be different |
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 information ratio (ex post and ex ante) and contrast it to the Sharpe ratio;
CFA® 2025 Level II Curriculum, Volume 6, Module 38.