Morningstar's RAR MethodI) Is One of the Most Widely-Used Performance

question 28

Multiple Choice

Morningstar's RAR methodI) is one of the most widely-used performance measures.II) indicates poor performance by placing up to 5 darts next to the fund's name.III) computes fund returns adjusted for loads.IV) computes fund returns adjusted for risk.V) produces ranking results that are the same as those produced with the Sharpe measure.

• A) I, II, and IV
• B) I, III, and IV
• C) I, IV, and V
• D) I, II, IV, and V
• E) I, II, III, IV, and V

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Definitions:

Coefficient Of Variation

A statistical measure that indicates the relative variability of data points in a data series around the mean, often used to assess the risk of an investment.

Probability Distribution

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.

Stock's Expected Return

The anticipated return on a stock, combining both the dividend payments and capital gains, based on historical data and future projections.

State Of Economy

The overall condition of a country's economic system, considering factors like growth rates, employment levels, inflation, and economic policies.