In Returns-Based Style Analysis a Coefficient of Determination of 95

question 41

Multiple Choice

In returns-based style analysis a coefficient of determination of 95% would suggest that

• A) The portfolio manager outperformed 95% of his peers.
• B) The portfolio manager was outperformed by 95% of his peers.
• C) 95% of the portfolio return variability could be attributed to portfolio style.
• D) 95% of the portfolio return variability could be attributed to stock selection skills.
• E) 5% of the portfolio return variability could be attributed to portfolio style.

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Definitions:

Symbolic Consciousness

Refers to the ability of humans to use symbols, such as language and other cultural products, to represent and understand reality.

Organisms

Living beings that can function independently, including animals, plants, bacteria, and fungi.

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The deliberate use of one's awareness to regulate and direct one's thoughts, actions, or emotions.

High-Level

Refers to abstract, complex or strategic thinking or reasoning that involves comprehensive analysis or synthesis of information.