The Risk-Free Rate, Average Returns, Standard Deviations and Betas for Three

question 11

Multiple Choice

The risk-free rate, average returns, standard deviations and betas for three funds and the S&P500 are given below. What is the T² measure for Portfolio A?

• A)12.4%
• B)2.38%
• C)0.91%
• D)3.64%

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Definitions:

Depreciation Expense

the systematic allocation of the cost of a tangible asset over its useful life.

Goodwill

An intangible asset that arises when a business is acquired for more than its fair value, attributed to factors like reputation, brand, and customer relationships.

Fair Value

The estimated market price of an asset or liability, reflecting the amount for which it could be exchanged or settled between knowledgeable parties in an arm's length transaction.

Book Value

This is the net value of a company's assets minus its liabilities, as recorded on the balance sheet.