Excess Return Portfolio Performance Measures

question 46

Multiple Choice

Excess return portfolio performance measures

• A) Adjust portfolio risk to match benchmark risk.
• B) Compare portfolio returns to expected returns under CAPM.
• C) Evaluate portfolio performance on the basis of return per unit of risk.
• D) Indicate historic average differential return per unit of historic variability of differential return.
• E) None of the above.

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Definitions:

Sample Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two quantitative variables in a sample.

Dependent Variable

The variable in an experiment or study that is affected by changes in the independent variable, and which researchers aim to measure or predict.

Independent Variable

A variable in an experiment or study that is manipulated or categorized to observe its effect on a dependent variable.

Coefficient Of Correlation

A measure that calculates the strength and direction of a linear relationship between two variables, represented as 'r'.