Which of the Following Statements About Returns-Based Analysis or Effective

question 78

Multiple Choice

Which of the following statements about returns-based analysis or effective mix analysis is true?

• A) This analysis compares the historical return pattern of the portfolio in question with the historical returns of various well-specified indexes.
• B) This analysis uses sophisticated quadratic programming techniques to indicate what styles or style combinations were most similar to the portfolio's actual historical returns.
• C) This analysis is based on the belief that the portfolio's current make-up will be a good predictor for the next period's returns.
• D) Choices a and b
• E) All of the above statements describe returns-based analysis or effective mix analysis

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Definitions:

Net Present Value

A financial metric indicating the value of all future cash flows of an investment, discounted back to present value.

Monthly Interest Rate

The interest rate applied on a monthly basis to loans or financial accounts, often used to calculate the monthly interest payments or earnings.

Net Savings

The amount of money saved after all expenses have been deducted.

Credit Agency

An organization that evaluates and rates the creditworthiness of individuals or corporations.