n NISM Certifications
XXI NISM Series XXI-A
Medium

Sharpe's performance measure divides the portfolio's risk premium by the ________.

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Slope of the fund's characteristic line

  2. Standard deviation of the rate of return

    Correct answer

  3. C

    Risk-free rate

  4. D

    Variance of the rate of return

Why this is the answer

The Sharpe ratio measures excess return per unit of total risk (standard deviation).

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