Investors who have all their assets in one portfolio of securities should rely on the Sharpe measure rather than the Treynor measure.

Question

Quizplus · Accepted Answer

The Sharpe measure evaluates the risk-adjusted return of a portfolio by considering total risk (standard deviation), which is relevant for investors with a single portfolio. The Treynor measure, on the other hand, considers only systematic risk (beta), which is more applicable to diversified portfolios.

Investors Who Have All Their Assets in One Portfolio of Securities