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You are considering investing in one of two stocks. Stock A has a higher Sharpe ratio than Stock B, but Stock B has a higher
You are considering investing in one of two stocks. Stock A has a higher Sharpe ratio than Stock B, but Stock B has a higher Treynor ratio than Stock A. What is the difference between the two ratios? Under what circumstances would you choose Stock A and under what circumstances would you choose Stock B?
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