FoRM

madhuri1682
Good Student
Posts: 29
Joined: Thu Oct 04, 2012 2:09 am

FoRM

Postby madhuri1682 » Thu Nov 01, 2012 9:29 am

Kalpesh argues with Jayesh that the Sharpe Ratio and the Treynor ratio are similar with only some difference. He lists the following difference.

I.Sharpe uses the standard deviation, Treynor uses beta
II.S is more appropriate for well diversified portfolios, T for individual assets
III.For perfectly diversified portfolios, S and T will give the same ranking, but different numbers (the ranking, not the number itself, is what is most important)
Which of these arguments is/are correct
Choose one answer.
a. I and III only
b. I only
c. All of the above
d. I and II only
The correct answer is all of the above.
Incorrect
Marks for this submission: 0/1.

isn't treynor measure more appropriate for well diversified portfolios.

Tags:

madhuri1682
Good Student
Posts: 29
Joined: Thu Oct 04, 2012 2:09 am

Re: FoRM

Postby madhuri1682 » Fri Nov 02, 2012 11:31 am

please answer my question

content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: FoRM

Postby content.pristine » Fri Nov 02, 2012 4:26 pm

Hi Madhuri,
I understand that your exam is around the corner. However, please understand we answer queries within 2 business days.

The second (II) option is wrong.
Since the risk measure in treynor ratio is systematic risk, it is better for well diversified portfolios.
The answer is A.

8-)

madhuri1682
Good Student
Posts: 29
Joined: Thu Oct 04, 2012 2:09 am

Re: FoRM

Postby madhuri1682 » Sat Nov 03, 2012 12:43 pm

thank u..:)


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