Paul Veras Is a 24-Year-Old Patient Whose Physician Referred Him

question 57

Multiple Choice

Paul Veras is a 24-year-old patient whose physician referred him to the ear specialist for whom you work because he has noticed a gradual loss of hearing in his left ear. The physician runs tests and finds the hearing in Paul's right ear is normal. Further tests reveal that Paul has an acoustic neuroma in the left ear. Paul is distressed at this news. "I am a musician," he says. "I need both of my ears! Would a hearing aid help?" Which of the following responses would you expect the physician to give?

• A) "Of course! We can have you fitted for a hearing aid immediately."
• B) "A hearing aid can help for a while, but you will eventually be completely deaf in that ear."
• C) "We can try a hearing aid first to see if it will help, if you want to."
• D) "Okay, but to avoid hearing loss in your right ear, you will need to wear aids in both ears."
• E) "No, a hearing aid will not help. We can try radiation, or we can remove the tumor surgically."

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Definitions:

Bogey Portfolio

An investment portfolio used as a benchmark to measure the performance of other portfolios.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for risk taken, excluding unsystematic risk.

Risk-Free Return

The return on investment with no risk of financial loss, often represented by the yield on government securities.

Sharpe's Measure

A ratio used to evaluate the risk-adjusted return of an investment, comparing its excess return over the risk-free rate to its standard deviation of returns.