Which of the Following Explains Why Talented National Hockey League

question 55

Multiple Choice

Which of the following explains why talented national hockey league players command much higher salaries than neurosurgeons?

• A)because the total value of hockey games is much higher than the total value of neurosurgery
• B)because it takes far more skill and training to be a national hockey league player than to be a neurosurgeon
• C)because the supply of talented national hockey league players is relatively low compared to the supply of neurosurgeons. Therefore, national hockey league players exert far more market power than neurosurgeon.
• D)because the supply of talented national hockey league players is low relative to its demand compared to the supply of neurosurgeons relative to demand for their services. Therefore, adding another player yields far greater marginal benefit than adding another neurosurgeon.

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Definitions:

Treynor Measures

Financial metrics used to assess the returns earned on a portfolio in excess of that which could have been earned on a risk-free investment, per each unit of market risk.

Sharpe Measure

A ratio developed by William F. Sharpe to measure risk-adjusted performance of an investment, calculating how much excess return you are receiving for the extra volatility that you endure for holding a riskier asset.

Dollar Weighted

A method of measuring investment returns which accounts for the size and timing of cash flows into and out of the portfolio.

Time Weighted

A method of calculating investment returns that eliminates the effects of cash inflows and outflows on the performance.