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Options
-
Degree of diversification of risk in the portfolio
Correct answer
- B
Underlying graphical model of risk return trade-off
- C
Excess market risk premium
- D
Differential return over risk rate of return
Why this is the answer
Sharpe ratio accounts for total risk (standard deviation), while Treynor uses systematic risk (beta). Differences arise based on the portfolio’s diversification level.
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