The Treynor measure and the Sharpe measure
I.both lead to the same conclusion about whether performance was superior.
II.rank portfolios in the same order.
III.may rank portfolios in a different order.
IV.use alpha differently.

Question

Quizplus · Accepted Answer

The Treynor measure and the Sharpe measure both use alpha to measure performance, but they use it in different ways. The Treynor measure uses alpha to measure the excess return per unit of risk, while the Sharpe measure uses alpha to measure the excess return per unit of standard deviation. As a result, the Treynor measure and the Sharpe measure may rank portfolios in a different order.

The Treynor Measure and the Sharpe Measure