Assume That as a Portfolio Manager the Beta of Your

question 91

Multiple Choice

Assume that as a portfolio manager the beta of your portfolio is 1.4 and that your performance is exactly on target with the SML data under condition 1. If the true SML data is given by condition 2, how much does your performance differ from the true SML?

• A)2.0% lower
• B)0.5% lower
• C)0.5% lower.
• D)1.0% higher
• E)2.0% higher

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Definitions:

Deposit

Money placed into a financial institution for safekeeping or in order to earn interest.

Annually

Pertaining to a period or event that occurs once every year.

Classic Automobile

A vintage or antique car often considered valuable due to its historical significance or rarity.

Valued

The importance, worth, or usefulness of something, often in terms of monetary worth.