The Sharpe ratio, also known as the reward-to-variability ratio, is the correct answer because it directly measures the slope of the capital allocation line.

• M² (Option A) is incorrect as it adjusts portfolio returns for total risk relative to a benchmark but does not represent the slope of the capital allocation line.
• The Treynor ratio (Option C) is incorrect because it corresponds to the slope of the security market line, not the capital allocation line. The Treynor ratio uses beta (systematic risk) instead of total risk, addressing a limitation of the Sharpe ratio.