What Is the Major Question When Evaluating a Portfolio's Performance

question 27

Multiple Choice

What is the major question when evaluating a portfolio's performance?

• A) Does the portfolio align with the investor's characteristics?
• B) Does the expected return of the portfolio meet the needs of the investor?
• C) Is the return on the portfolio adequate to compensate for its risk?
• D) Is the portfolio's risk in line with the personal characteristics of the investor?

---

Definitions:

F-Ratio

The ratio used in analysis of variance (ANOVA) to compare the variance between groups to the variance within groups.

Main Effect

The main effect is the impact of an independent variable on a dependent variable in a statistical model, ignoring other variables' influences.

Factor A

Factor A is often used in experimental design to represent one of the independent variables being tested for its effect on a dependent variable.

Reject

In statistical analysis, to refuse to accept a null hypothesis, based on the outcome of a test showing that observed data is unlikely under the hypothesis.