The correct answer is A. Sharpe’s reward to variability ratio.
Sharpe’s ratio is a measure of the excess return per unit of risk. It is calculated by dividing the average return of a portfolio by its standard deviation. A higher Sharpe ratio indicates that a portfolio has generated higher returns for a given level of risk.
Treynor’s ratio is a measure of the excess return per unit of systematic risk. It is calculated by dividing the average return of a portfolio by its beta. A higher Treynor ratio indicates that a portfolio has generated higher returns for a given level of systematic risk.
Jensen’s alpha is a measure of the return that a portfolio has generated in excess of what would be expected given its beta. It is calculated by regressing the portfolio’s returns on the market returns and then taking the intercept of the regression line. A positive Jensen’s alpha indicates that the portfolio has generated a return in excess of what would be expected given its beta.
Treynor’s variance to volatility ratio is not a commonly used measure of performance. It is calculated by dividing the portfolio’s variance by its volatility. A higher Treynor’s variance to volatility ratio indicates that the portfolio has generated higher returns for a given level of volatility.
In conclusion, the correct answer is A. Sharpe’s reward to variability ratio.