Benchmark Error

question 14

Multiple Choice

Benchmark error

• A)refers to the use of an incorrect market proxy in tests of the CAPM.
• B)can result in inconclusive tests of the CAPM.
• C)can result in incorrect evaluation measures for portfolio managers.
• D)refers to the use of an incorrect market proxy in tests of the CAPM and can result in inconclusive tests of the CAPM.
• E)All of the options.

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Definitions:

Voluntary Response Sample

A sampling method where participants self-select to be a part of a study, often leading to biased results due to the non-random nature of the sample choice.

Researcher Bias

Researcher bias refers to a systematic error introduced into sampling or testing by selecting or encouraging one outcome or answer over others, which can affect the validity and reliability of research findings.

Response Rate

The percentage of people who answer or participate in a survey or study compared to the total number surveyed.

Overcounting

The process or instance of recording or reporting higher numbers or quantities than actually exist, often found in contexts like population census or inventory management.