Assume That as a Portfolio Manager the Beta of Your

question 9

Multiple Choice

Assume that as a portfolio manager the beta of your portfolio is 1.1 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)3.2% lower
• B)6.4% lower
• C)4.9% lower
• D)3.2% higher
• E)6.4% higher

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Definitions:

Business Strategies

Plans of action or policies designed to achieve significant goals or objectives within the competitive business environment.

Social Value

The importance or benefit that something provides to society or a community at large.

Geothermal Energy

A form of renewable energy derived from the natural heat of the Earth's interior, used for heating and power generation.

Alternative Energy

Energy generated in ways that do not deplete natural resources or harm the environment, especially by avoiding the use of fossil fuels and nuclear power.