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American Bankers Association CTFA Exam - Topic 6 Question 5 Discussion

The principal reasons for using the Sharpe ratio when calculating a portfolio's performance are:
A) It indicates the percentage return above/below the risk-free rate for each unit of risk taken and D) The higher the number, the more a portfolio manager can be said to have added value
B) It will always be quoted on a rolling quarterly basis
C) A positive Sharpe ratio will always guarantee positive returns

American Bankers Association CTFA Exam - Topic 6 Question 5 Discussion

Actual exam question for American Bankers Association's CTFA exam
Question #: 5
Topic #: 6
[All CTFA Questions]

The principal reasons for using the Sharpe ratio when calculating a portfolio's performance are:

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Suggested Answer: A, D

by Goldie at May 10, 2022, 03:14 AM

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Dion
10 months ago
A and D are spot on, love those metrics!
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Staci
10 months ago
Wait, B isn't true, right? Sharpe ratios can be annualized too!
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Caren
11 months ago
D makes sense, higher is better for value added!
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Sheldon
11 months ago
I disagree with C, a positive Sharpe ratio doesn't guarantee profits.
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Maile
11 months ago
A is definitely true, it shows risk-adjusted returns!
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Pamela
11 months ago
Hmm, I'm a bit unsure about this one. Project management involves a lot of different factors, so I'll need to think carefully about which of these options is the most essential.
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Santos
11 months ago
From what I studied, I believe Aviatrix Gateways can scale up but actually not scale down, so I'm going with C.
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Wilford
11 months ago
This seems straightforward to me. The pruning policy is set to remove Apache-licensed images, so the effect is that those images will be deleted during the next prune job. Option C is the clear answer here.
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Herminia
11 months ago
Okay, I've got a strategy. The expiration date is 08/10, so that means August 10th. The last day to use the product would be the last day of that month, which is August 31st.
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