What is the Treynor ratio and how does it differ from the Sharpe ratio?
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A
Both are identical; they use different notation for the same calculation
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B
The Treynor ratio uses beta (systematic risk) in the denominator instead of total standard deviation, making it useful when a portfolio is part of a larger diversified whole
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C
The Treynor ratio uses downside deviation while Sharpe uses total standard deviation
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D
The Treynor ratio compares portfolio return to a benchmark rather than a risk-free rate