If a Professionally-Managed Portfolio Consistently Outperforms the Market Proxy on a Risk-Adjusted

question 38

Multiple Choice

If a professionally-managed portfolio consistently outperforms the market proxy on a risk-adjusted basis and the market is efficient, it should be concluded that

• A)the CAPM is invalid.
• B)the proxy is inadequate.
• C)either the CAPM is invalid or the proxy is inadequate.
• D)the CAPM is valid and the proxy is adequate.

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Definitions:

Social Issues

Problems that affect many people within a society, often relating to matters that impact an individual's daily life and society's well-being.

Personal Troubles

are individual challenges or problems that a person faces, which may also reflect broader social issues.

C.Wright Mills

An American sociologist known for his work on the power elite and the sociological imagination, which links individual experiences with larger social and historical forces.

Percent

A mathematical term representing a part per hundred, used in expressing proportions, rates, or fractions in statistics and daily computations.