investment and portfolio analysis - Essay Example

Only on StudentShare

Extract of sample
investment and portfolio analysis

On the contrary, Sharpe ratio refers to a measure of risk adjustment measure that utilizes standard deviation when computing portfolio returns and inherent risk associated with a particular portfolio (Ctaff, 2012). Empirical research asserts that if Sharpe ratio is higher it implies returns are better. Therefore, by utilizing standard deviation, Sharp ratio assumes that the relevant risk is total risk unlike Treynor ratio which assumes that the relevant risk is systematic (Ctaff, 2012). Both Treyon and Sharpe ratios are similar; however, the two measures differ in terms of how they determine of risk volatility. Whereby, Treyon ration utilizes beta while Sharp ratio tend to utilize standard deviation (Anric, 2013). Information ratio measures the ability of corporate managers to utilize skills/ luck to generate excess returns beyond the established benchmark. This ratio utilizes alpha elements as well as standard deviation to measure volatilities associated with a particular portfolio (Reilly and Brown, 2012). Therefore, information ratio assumes that the relevant risk is total where both systematic and unsystematic risks are combined (Harkins, 2012). ...
Download paper

Summary

Investment and portfolio analysis Tutor Date: 1. The five different measures of risk adjusted Portfolio Performance; the and how each of these measures defines the risk that investors face. The five of the different measures of risk adjusted portfolio performance include; Treynor ratio, Sharpe ratio, Information ratio, Jensen alpha and Sortino ratio…
Author : tpollich

Related Essays

Investment Portfolio
8 pages (2008 words) Assignment
Investment analysis
5 pages (1255 words) Essay
Investment analysis
3 pages (753 words) Essay
Portfolio Analysis.
13 pages (3263 words) Assignment
Portfolio Analysis and Investment Management
5 pages (1255 words) Essay
Portfolio Theory and Investment Analysis
8 pages (2008 words) Term Paper
Investment and Portfolio Management
16 pages (4016 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!