Portfolio Managers Paul Martin and Kevin Krueger Each Manage $1,000,000

question 11

Multiple Choice

Portfolio managers Paul Martin and Kevin Krueger each manage $1,000,000 funds.Paul Martin has perfect foresight and the call option value of his perfect foresight is $150,000.Kevin Krueger is an imperfect forecaster and correctly predicts 50% of all bull markets and 70% of all bear markets.The correct measure of timing ability for Kevin Krueger is __________.

• A) 20%
• B) 60%
• C) 75%
• D) 120%

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Definitions:

Rubisco

An enzyme involved in the first major step of carbon fixation, a process by which atmospheric carbon dioxide is converted by plants to energy-rich molecules.

Photorespiration

The process that reduces the efficiency of photosynthesis in C3 plants during hot spells in summer; consumes oxygen and produces carbon dioxide through the degradation of Calvin cycle intermediates.

Rubisco

An enzyme that catalyzes the first step of carbon fixation in the process of photosynthesis.

Calvin Cycle

A biochemical process in plants, algae, and cyanobacteria which converts carbon dioxide and water into organic compounds, especially sugars, using ATP and NADPH produced in photosynthesis.