If an Investor's Excess Return Is Negative

question 1

Multiple Choice

If an investor's excess return is negative,

• A)the realized return was less than the return earned by the market
• B)the required return exceeded the realized return
• C)the investor constructed a poorly diversified portfolio
• D)the investor's portfolio had excessive diversification

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Definitions:

Contextual Validity

The appropriateness of research or assessment methods and conclusions within the specific context they are applied.

Face Validity

The extent to which a test is subjectively viewed as covering the concept it purports to measure, often assessed through its appearance to non-experts.

Predictive Validity

The extent to which a score on a test or measurement accurately predicts future performance on a related task or behavior.

Concurrent Validity

The degree to which the results of a particular test or measurement correspond to those of a previously established measurement for the same construct.