The correct answer is: C. 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.
Jensen’s alpha is a measure of the performance of a portfolio relative to a benchmark. It is calculated by taking the average return of a portfolio minus the return of the benchmark, and then dividing by the standard deviation of the portfolio. A positive Jensen’s alpha indicates that a portfolio has outperformed the benchmark, while a negative Jensen’s alpha indicates that the portfolio has underperformed the benchmark.
Treynor’s ratio is a measure of the performance of a portfolio relative to the market portfolio. It is calculated by taking the average return of a portfolio minus the risk-free rate, and then dividing by the beta of the portfolio. A higher Treynor ratio indicates that a portfolio has generated higher returns for a given level of market risk.
The variance to volatility ratio is not a commonly used measure of performance. It is calculated by dividing the variance of a portfolio by its standard deviation. A higher variance to volatility ratio indicates that a portfolio has experienced more volatility for a given level of risk.