If a Portfolio Manager Consistently Obtains a High Sharpe Measure

question 11

Multiple Choice

If a portfolio manager consistently obtains a high Sharpe measure, the manager's forecasting ability

• A) is above average.
• B) is average.
• C) is below average.
• D) does not exist.
• E) cannot be determined based on the Sharpe measure.

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Definitions:

Toledo

A city known for its rich history, located in central Spain, or a city in the U.S. state of Ohio.

Fallacy Of Composition

The error of assuming what is true of a part is automatically true of the whole.

Division

A logical fallacy where one assumes that what is true of a whole must also be true of its parts.

Slippery Slope Argument

A logical fallacy that argues a relatively small first step will lead to a chain of related events culminating in some significant effect, often negative.