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**Basic Question 1 of 8**

Which statement is false regarding Sharpe ratio?

B. Sharpe ratio cannot be applied to assets with negative beta.

C. If the investor does not have any other assets than the portfolio, then the use of total risk is appropriate in the Sharpe ratio.

A. Sharpe ratio can be used to rank portfolios.

B. Sharpe ratio cannot be applied to assets with negative beta.

C. If the investor does not have any other assets than the portfolio, then the use of total risk is appropriate in the Sharpe ratio.

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**User Contributed Comments**
2

User |
Comment |
---|---|

michlam14 |
treynor ratio cannot be applied to assets with neg beta |

chcarnes |
Sharpe uses standard deviation |

I used your notes and passed ... highly recommended!

#### Lauren

**Learning Outcome Statements**

calculate and interpret the Sharpe ratio, Treynor ratio, M2, and Jensen's alpha

*CFA® 2024 Level I Curriculum, Volume 2, Module 2.*