Jason Is Playing with His Brother's New Skateboard When He

question 55

Multiple Choice

Jason is playing with his brother's new skateboard when he runs it into a wall and breaks it into pieces. Psychoanalysts would maintain that the destruction of the skateboard was

• A) just an accident.
• B) probably determined by some unconscious desire in Jason to ruin his brother's new toy.
• C) a conscious free choice made by Jason right before he ran it into the wall.
• D) caused by the environmental conditions.

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Definitions:

Jensen Portfolio

A portfolio evaluated using Jensen's Alpha, which measures the excess return of the portfolio over the predicted return by the CAPM model for its level of risk.

Treynor Measures

Financial metrics used to assess the returns earned on a portfolio in excess of that which could have been earned on a risk-free investment, per each unit of market risk.

Sharpe Measure

A ratio developed by William F. Sharpe to measure risk-adjusted performance of an investment, calculating how much excess return you are receiving for the extra volatility that you endure for holding a riskier asset.

Dollar Weighted

A method of measuring investment returns which accounts for the size and timing of cash flows into and out of the portfolio.