Jeremy Is 8 Years Old, and She Performs About as Well

question 149

Multiple Choice

Jeremy is 8 years old, and she performs about as well as most 10 year olds. Jeremy's IQ is

• A) 80
• B) 117
• C) 120
• D) 125

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Definitions:

Equally-Weighted Portfolio

An equally-weighted portfolio is an investment strategy that gives the same weight, or importance, to each asset in the portfolio, regardless of the size or market value of the companies.

Securities

Securities that signify either an equity stake in a corporation that is publicly traded, a debt interest in a company or government entity, or ownership rights as delineated by an option.

HML Beta

A measure used in finance to assess the sensitivity of an asset or portfolio to a value factor, defined as high minus low book-to-market stocks.

SMB Beta

Stands for Small Minus Big Beta, a metric used in finance to measure a stock's sensitivity to the SMB factor, which represents the excess return of small-cap stocks over large-cap stocks.