Risk-Adjusted Mutual Fund Performance Measures Have Decreased in Popularity Because

question 55

Multiple Choice

Risk-adjusted mutual fund performance measures have decreased in popularity because

• A)in nearly efficient markets it is extremely difficult for portfolio managers to outperform the market.
• B)the measures usually result in negative performance results for the portfolio managers.
• C)the high rates of return earned by the mutual funds have made the measures useless.
• D)A and B.
• E)none of the above.

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Definitions:

Fixed Manufacturing Overhead Budget Variance

The difference between the actual fixed manufacturing overhead costs and the budgeted fixed overhead costs.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred during production and the standard cost of variable overhead allocated for the actual production volume.

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to the variance in the volume of production.

Fixed Component

A cost or part of a cost that remains unchanged regardless of changes in the level of output or activity.