The Sharpe reward-to-variability ratio does not need the
A) beta of the portfolio.
B) average riskfree return.
C) average return of the portfolio.
D) portfolio's average excess return.

Question

Quizplus · Accepted Answer

The Sharpe ratio is calculated using the portfolio's average excess return, the average risk-free return, and the standard deviation of the portfolio's excess return. It does not require the beta of the portfolio, which is a measure of the portfolio's volatility in relation to the market used in other metrics like the Capital Asset Pricing Model (CAPM).

The Sharpe Reward-To-Variability Ratio Does Not Need the