If a Mutual Fund Portfolio Earned a Return That Exceeded

question 23

True/False

If a mutual fund portfolio earned a return that exceeded the return on the S&P 500 stock index, you may conclude that the fund outperformed the market on a risk-adjusted basis.

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Definitions:

Standard Deviations

A statistic that measures the dispersion of a dataset relative to its mean, used to quantify the amount of variation or spread of a set of data values.

Stocks A and B

Placeholder names used in discussions to refer to two specific, but unspecified, stocks or to compare aspects of different stocks.

Return

The income generated from an investment, expressed as a percentage of the investment's original cost.

Markowitz Efficient Frontier

A graphical representation of the most efficient portfolios that provide the best possible return for a given level of risk.