alleryStart learning →Which statement about Sharpe and Treynor ratios is correct?
ABoth use systematic risk only
BSharpe uses total risk, Treynor beta
CTreynor uses total risk only
DSharpe uses beta, not variance
Answer & Solution
Correct answer: B. Sharpe uses total risk, Treynor beta
Sharpe uses standard deviation covering all risk, while Treynor uses beta covering systematic risk only.
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