A Portfolio Manager's Ranking Within a Comparison Universe May Not

question 62

Multiple Choice

A portfolio manager's ranking within a comparison universe may not provide a good measure of performance because

• A)portfolio returns may not be calculated in the same way.
• B)portfolio durations can vary across managers.
• C)if managers follow a particular style or subgroup,portfolios may not be comparable.
• D)both B and C.
• E)all of the above.

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Definitions:

Labour Efficiency

The measure of the amount of work achieved by a workforce compared to the effort put in.

Material Quantity

The amount of raw materials or supplies used in the production of goods, often monitored to control costs and ensure efficient resource use.

Labour Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the hours worked.

Favourable Variance

A financial term indicating that actual costs were lower than budgeted costs, or actual revenues were higher than expected.