There Appears to Be a Role for a Theory of Active

question 35

Multiple Choice

There appears to be a role for a theory of active portfolio management because

• A)some portfolio managers have produced sequences of abnormal returns that are difficult to label as lucky outcomes.
• B)the "noise" in the realized returns is enough to prevent the rejection of the hypothesis that some money managers have outperformed a passive strategy by a statistically small, yet economic, margin.
• C)some anomalies in realized returns have been persistent enough to suggest that portfolio managers who identified these anomalies in a timely fashion could have outperformed a passive strategy over prolonged periods.
• D)some portfolio managers have produced sequences of abnormal returns that are difficult to label as lucky outcomes and the "noise" in the realized returns is enough to prevent the rejection of the hypothesis that some money managers have outperformed a passive strategy by a statistically small, yet economic, margin.
• E)All of the options

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Definitions:

Signaling

The process by which cells communicate with each other through the exchange of chemical or physical signals.

Tumor Suppressor Gene

A gene (also known as an anti-oncogene) whose normal role is to block cell division in response to certain growth-inhibiting factors; when mutated, may contribute to the formation of a cancer cell. Compare with oncogene.

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A type of breast cancer that occurs more frequently in members of the same family, often due to genetic predispositions.

Maternal Effect Genes

Genes whose expression in a mother affects the phenotype of her offspring, often independent of the offspring's own genotype.