Ideally, clients would like to invest with the portfolio manager who has
A) a moderate personal risk-aversion coefficient.
B) a low personal risk-aversion coefficient.
C) the highest Sharpe measure.
D) the highest record of realized returns.
E) the lowest record of standard deviations.

Question

Quizplus · Accepted Answer

The Sharpe ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk. It is a good indicator of the risk-adjusted return of a portfolio, making it a preferred choice for clients who want to understand how well a portfolio manager is compensating for the risk taken.

Ideally, Clients Would Like to Invest with the Portfolio Manager