Active portfolio managers try to construct a risky portfolio with
A) a higher Sharpe measure than a passive strategy.
B) a lower Sharpe measure than a passive strategy.
C) the same Sharpe measure as a passive strategy.
D) very few securities.

Question

Quizplus · Accepted Answer

Active portfolio managers aim to outperform the market by constructing portfolios that have a higher Sharpe ratio than those created through passive strategies. The Sharpe ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk, making it a key metric for comparing the risk-adjusted returns of active versus passive management.

Active Portfolio Managers Try to Construct a Risky Portfolio with