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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 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
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.