Which statement best describes the Sharpe ratio?

It compares the return of the portfolio with the return of the market as a whole, relative to the portfolio ' s risk as measured by its standard deviation.

It compares the return of the portfolio with the riskless rate of return, relative to the portfolio ' s risk as measured by its standard deviation.

It compares the return of the portfolio with the return of the market as a whole, relative to the portfolio ' s risk as measured by its beta.

It compares the return of the portfolio with the riskless rate of return, relative to the market ' s risk as measured by its standard deviation.