Final answer:
The Sharpe ratio measures investment performance relative to risk, and from 1986-2013, some undefined asset classes had the lowest Sharpe ratios. Specific data is needed to identify them, but generally, high risk can harm a portfolio during downturns or volatility.
Step-by-step explanation:
The question refers to the Sharpe ratio, a measure used to evaluate the performance of an investment by adjusting for its risk. The Sharpe ratio is defined as the investment return minus the risk-free rate, divided by the standard deviation of the investment's excess return.
From 1986-2013, the Sharpe ratio was lowest for certain asset classes. To determine which specific asset class had the lowest Sharpe ratio in that period, one would need to look at historical financial data which is not provided here.
However, a high-risk level can sometimes be detrimental to an investment portfolio, particularly during economic downturns or market volatility, as it can lead to greater losses compared to more conservative investments.