Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
20 Cards in this Set
- Front
- Back
|
Which one of the following assess the ability of a money manager to balance high returns with an acceptable level of risk?
|
performance evaluation
|
|
|
The unadjusted total percentage return on security that has not been compared to any benchmark is referred to as which one of the following?
|
raw return
|
|
|
The risk premium of a portfolio divided by the portfolio's standard deviation defines which one of the following performance measures?
|
Sharpe ratio
|
|
|
Which one of the following is computed by dividing a portfolio's risk premium by the portfolio beta?
|
Treynor ratio
|
|
|
Which one of the following measures a portfolio's raw return against the expected return based on the Capital Asset Pricing Model?
|
Jensen's alpha
|
|
|
Which one of the following concerns a money manager's control over investment risks, particularly potential short-run losses?
|
Investment risk management
|
|
|
Which one of the following assesses risk by stating the probability of a loss a portfolio might incur within a stated time period given a specific probability?
|
Value-at-Risk
|
|
|
Which one of the following is a statistical model, defined by its mean and standard deviation, that is used to assess probabilities?
|
normal distribution
|
|
|
Which one of the following measures a security's return in relation to the total risk associated with that security?
|
Sharpe ratio
|
|
|
The Sharpe ratio measures a security's return relative to which one of the following?
|
Total risk
|
|
|
The Sharpe ratio is best used to evaluate which one of the following?
|
diversified portfolios
|
|
|
Which one of the following measures returns in relation to total risk?
|
Sharpe ratio
|
|
|
Which one of the following values would be the most preferable as a Sharpe ratio?
|
1.02
|
|
|
Which one of the following measures risk premium in relation to systematic risk?
|
Treynor ratio
|
|
|
You are comparing three securities and discover they all have identical Treynor ratios. Given this information, which one of the following must be true regarding these three securities?
|
They earn identical rewards per unit of systematic risk.
|
|
|
You are comparing three assets which have differing Treynor ratios. Given this, which one of the following must be true?
|
The preferred investment is the asset with the highest Treynor ratio.
|
|
|
You are considering the purchase of a mutual fund. You have found three funds that meet your basic criteria. Each fund has a different alpha. Which alpha indicates the preferred investment?
|
the highest positive alpha
|
|
|
Which one of the following statements is correct in relation to a security that has a negative Jensen's alpha?
|
The security is overpriced and will plot below the security market line.
|
|
|
Which one of the following is the best indication that a security is correctly priced according to the Capital Asset Pricing Model?
|
alpha of zero
|
|
|
Tony brags that his portfolio's rate of return is "beating the market". Which one of the following would best substantiate his claim?
|
positive Jensen's alpha
|
