A Weather Forecaster Studies Relationships Among Phenomena Such as Wind

question 41

Multiple Choice

A weather forecaster studies relationships among phenomena such as wind direction,barometric pressure,humidity,jet stream flow,and temperature.Based upon his or her knowledge of the relationships between these variables and the weather,the forecaster predicts there is an 80 percent chance of rain tomorrow.Which method of prediction have you used?

• A)guessing
• B)statistics
• C)extrapolation
• D)predictive model
• E)forecasting

Understand the concept of comparison universe and its relevance to mutual fund performance evaluation.

Grasp the significance of serial correlation in mutual and hedge fund performance.

Evaluate the performance of mutual funds using Morningstar’s RAR method and understand its criteria.

Understand the differences between geometric and arithmetic average returns and their applications in performance evaluation.

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Definitions:

Secondarily Liable

Someone who is secondarily liable holds responsibility to fulfill an obligation if the primary party fails to do so, commonly seen in guarantor or co-signer financial arrangements.

Payable

Refers to money that is owed by a person or company and must be paid to another party.

Obligation

A legal or moral duty to do or not do something, often with legal implications if not fulfilled.

Indorses

Refers to the act of signing the back of a financial document, thus transferring rights or ownership.