An Investor Would Like to Evaluate the Performance of Her

question 4

Multiple Choice

An investor would like to evaluate the performance of her portfolio using the Treynor ratio.The past year realised return and systematic risk of the portfolio,the benchmark portfolio,given by the S&P/ASX share price index,and government bonds are:
Has the portfolio:

• A)underperformed relative to the benchmark.
• B)outperformed the market benchmark on a risk-adjusted basis.
• C)underperformed the market benchmark on a risk-adjusted basis.
• D)outperformed the Government Bonds.

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Definitions:

Cost of Goods Sold

The immediate expenses directly linked to the manufacturing of products sold by a firm, such as labor and materials used.

Finished Goods Inventories

The stock of completed products that are ready to be sold but have not yet been purchased or distributed.

Credit Balance

The amount of money credited to an account, indicating the sum that a financial institution or vendor owes to the account holder.

Manufacturing Overhead

A rephrasing of Factory Overhead, encompassing all indirect costs associated with the manufacturing process, such as utilities, maintenance, and management salaries.