Which of the Following Is an Example of an Altruistic

question 113

Multiple Choice

Which of the following is an example of an altruistic behavior?

• A) accidentally scaring a bank robber away by screaming when you see her
• B) telling the police that your company dumps toxic waste, even though you will lose your job
• C) setting up a scholarship fund for your children because you will receive tax deductions
• D) helping your neighbor cut down a tree, so that the leaves do not blow into your yard anymore

---

Definitions:

Treynor-Black Model

A special case of the Markowitz model of efficient diversification, derived by assuming returns are generated by the index model.

Residual Variance

The variance of the error terms in a regression model, representing the amount of variation that cannot be explained by the model's inputs.

Alpha/Beta

Measures in finance; Alpha represents the strategy's returns above the benchmark, whereas Beta indicates the volatility relative to the market.

Sharpe Measure

A measure of the excess return (or risk premium) per unit of risk in an investment asset or a trading strategy, calculated as the difference between the asset's returns and the risk-free rate, divided by the asset's standard deviation.