Which is the better measure to estimate the performance of a well-diversified portfolio in relation to the market index?
A)Sharpe's RVAR
B)Treynor's RVOL
C)Total return (alone)
D)Portfolio beta (alone)

Question

Quizplus · Accepted Answer

Treynor's RVOL (Treynor Ratio) is the better measure for a well-diversified portfolio as it considers the portfolio's excess return relative to its systematic risk, measured by beta, which is relevant for diversified portfolios.

Which Is the Better Measure to Estimate the Performance of a Well-Diversified