A Managed Portfolio Has a Standard Deviation Equal to 22

question 4

Multiple Choice

A managed portfolio has a standard deviation equal to 22% and a beta of 0.9 when the market portfolio's standard deviation is 26%. The adjusted portfolio P________ needed to calculate the M² measure will have ________ invested in the managed portfolio and the rest in T-bonds.

• A)84.6%
• B)118%
• C)18%
• D)15.4%

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Definitions:

APS

Average Propensity to Save; it is a macroeconomic term that represents the proportion of income that is saved rather than spent on consumption. It is calculated by dividing total savings by total income.

APC

Average Propensity to Consume, which is the fraction of income that a person or population spends rather than saving.

APS

The Average Propensity to Save, which is the proportion of total income that is saved rather than spent on consumption.

APC

It stands for Average Propensity to Consume, indicating the fraction of income that is spent on consumption rather than savings.