Question 1

According to a study by John McDonald published in the Journal of Financial and Quantitative Analysis,portfolio managers generally

Accepted Answer

A) Follow the objectives initially set for the portfolio 
B) Set objectives for the portfolio but don't follow them 
C) Have difficulty following the portfolio objectives 
D) None of the above 
A) Follow the objectives initially set for the portfolio 
B) Set objectives for the portfolio but don't follow them 
C) Have difficulty following the portfolio objectives 
D) None of the above

Question 2

Treynor uses beta as a measure of risk.

Accepted Answer

A) True 
 B)False

Question 3

The term,EXCESS,returns is commonly defined as

Accepted Answer

A) Total portfolio returns minus the market rate 
B) Total portfolio returns minus the risk-free rate 
C) (portfolio returns minus the risk-free rate)/beta 
D) None of the above 
A) Total portfolio returns minus the market rate 
B) Total portfolio returns minus the risk-free rate 
C) (portfolio returns minus the risk-free rate)/beta 
D) None of the above

Question 4

Most funds show a positive performance compared to a market average.

Accepted Answer

A) True 
 B)False

Question 5

R2is a good measure of efficient diversification.

Accepted Answer

A) True 
 B)False

Question 6

Under all three - Sharpe,Treynor,Jensen - approaches,the return measurement must be compared to risk in some form.

Accepted Answer

A) True 
 B)False

Question 7

Studies by Ippolito as well as Goodwin indicate that Mutual fund managers are superior performers.

Accepted Answer

A) True 
 B)False

Question 8

A fund manager has almost total control over the beta of his portfolio.

Accepted Answer

A) True 
 B)False

Question 9

In an index fund

Accepted Answer

A) Returns are adjusted for changes in the consumer price index 
B) Funds are invested in a mutual fund that attempts to replicate the performance of a major market index 
C) Investors are guaranteed returns equal to a major market index 
D) High commissions and management fees are charged because of attempts to beat the market 
A) Returns are adjusted for changes in the consumer price index 
B) Funds are invested in a mutual fund that attempts to replicate the performance of a major market index 
C) Investors are guaranteed returns equal to a major market index 
D) High commissions and management fees are charged because of attempts to beat the market

Question 10

Professional money managers may be evaluated based on

Accepted Answer

A) Their adherence to stated objectives 
B) Their ability to efficiently diversify the portfolio 
C) Their return relative to degree of risk 
D) All of the above 
A) Their adherence to stated objectives 
B) Their ability to efficiently diversify the portfolio 
C) Their return relative to degree of risk 
D) All of the above

Question 11

A firm that evaluates portfolios uses the Sharpe approach to measuring performance.How would it rank these three portfolios?

Accepted Answer

\[\begin{array} { | l | r | r | r | } 
\

Question 12

A portfolio manager with a beta less than one should be expected to provide higher returns than the market.

Accepted Answer

A) True 
 B)False

Question 13

Adherence to objectives as measured by risk exposure is important in evaluating a fund manager because risk is one of the variables a money manager can directly control.

Accepted Answer

A) True 
 B)False

Question 14

The wise money manager will generally adhere strictly to stated objectives.

Accepted Answer

A) True 
 B)False

Question 15

In examining the performance of fund managers,the return measure commonly used is:

Accepted Answer

A) The standard deviation 
B) The beta 
C) Excess returns 
D) Total returns 
A) The standard deviation 
B) The beta 
C) Excess returns 
D) Total returns

Question 16

The least risk exposure would be appropriate for a mutual fund which

Accepted Answer

A) Generates income for investors living on a fixed income 
B) Is oriented toward capital gains for wealthy investors 
C) Is designed for young,upwardly mobile professionals 
D) None of the above 
A) Generates income for investors living on a fixed income 
B) Is oriented toward capital gains for wealthy investors 
C) Is designed for young,upwardly mobile professionals 
D) None of the above

Question 17

A mutual fund with excess returns very similar to those of the market will have an R2(coefficient of determination)of

Accepted Answer

A) Slightly less than 1 
B) Slightly greater than 1 
C) Greater than or less than one 
D) There is not enough information to tell 
A) Slightly less than 1 
B) Slightly greater than 1 
C) Greater than or less than one 
D) There is not enough information to tell

Question 18

Excess returns are equal to the

Accepted Answer

A) Total portfolio return minus the beta 
B) Total portfolio return minus the return on the S&P 500 
C) Total portfolio return minus the risk-free rate 
D) Total portfolio return minus the standard deviation 
A) Total portfolio return minus the beta 
B) Total portfolio return minus the return on the S&P 500 
C) Total portfolio return minus the risk-free rate 
D) Total portfolio return minus the standard deviation

Question 19

Sharpe uses beta as a measure of risk.

Accepted Answer

A) True 
 B)False

Exam 22: Measuring Risks and Returns of Portfolio Managers

According to a study by John McDonald published in the Journal of Financial and Quantitative Analysis,portfolio managers generally

Treynor uses beta as a measure of risk.

The term,EXCESS,returns is commonly defined as

Most funds show a positive performance compared to a market average.

R2is a good measure of efficient diversification.

Under all three - Sharpe,Treynor,Jensen - approaches,the return measurement must be compared to risk in some form.

Studies by Ippolito as well as Goodwin indicate that Mutual fund managers are superior performers.

A fund manager has almost total control over the beta of his portfolio.

In an index fund

Professional money managers may be evaluated based on

A firm that evaluates portfolios uses the Sharpe approach to measuring performance.How would it rank these three portfolios?

A portfolio manager with a beta less than one should be expected to provide higher returns than the market.

Adherence to objectives as measured by risk exposure is important in evaluating a fund manager because risk is one of the variables a money manager can directly control.

The wise money manager will generally adhere strictly to stated objectives.

In examining the performance of fund managers,the return measure commonly used is:

The least risk exposure would be appropriate for a mutual fund which

A mutual fund with excess returns very similar to those of the market will have an R2(coefficient of determination)of

Excess returns are equal to the

Sharpe uses beta as a measure of risk.

The Investment Setting

Security Markets: Present and Future

Participating in the Market

Sources of Investment Information

Economic and Industry Analysis

Industry Analysis

Valuation of the Individual Firm

Financial Statement Analysis

A Basic View of Technical Analysis and Market Efficiency

Investment in Special Situations and Anomalies

Bond and Fixed Income Fundamentals

Principles of Bond Valuation and Investment

Duration and Reinvestment Concepts

Convertible Securities and Warrants

Put and Call Options

Commodities and Financial Futures

Stock Index Futures and Options

Mutual Funds

International Securities Markets

Investment in Real Assets

A Basic Look at Portfolio Management and Capital Market Theory

Sustainable Growth Model

a Black Scholes Option Pricing Model

A Comprehensive Analysis for Real Estate Investment Decisions

Unit Investment Trusts Uits

The Makeup of Institutional Investors

Filters