A Portfolio Manager Uses Two Different Proxies for the Market

question 8

Multiple Choice

A portfolio manager uses two different proxies for the market portfolio, the S&P 500 index and theMSCI World index. Differences in the manager's portfolio performance resulting from the differentmarket portfolios is referred to as

• A)The size effect
• B)The market effect
• C)Measurement error
• D)Benchmark error
• E)Manager's performance error

Comprehend the advantages and challenges associated with different performance appraisal methods.

Understand how performance management supports both developmental and administrative decisions.

Distinguish between different ranking methods and their suitability for performance measurement.

Grasp the importance of aligning performance management with organizational goals.

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Definitions:

Product Warranty

A promise or assurance given by a manufacturer or seller to a buyer that a product is free from defects and will perform as specified for a certain period of time.

Warranty Repairs

Repairs or replacements offered for free by the manufacturer or seller to correct defects covered under a warranty.

Sales

The total amount of revenue generated from goods or services sold by a company.

Payroll Tax Expense

Taxes that are paid based on the salary and wages of employees, including social security, medicare, and federal and state unemployment taxes.