Consider the Treynor-Black Model

question 11

Multiple Choice

Consider the Treynor-Black model. The alpha of an active portfolio is 3%. The expected return on the market index is 10%. The variance of the return on the market portfolio is 4%. The nonsystematic variance of the active
Portfolio is 2%. The risk-free rate of return is 3%. The beta of the active portfolio is 1.15. The optimal proportion
To invest in the active portfolio is

• A) 48.7%.
• B) 98.4%.
• C) 51.3%.
• D) 100.0%.

Understand the ethical decision-making framework.

Define and describe the essential elements of the marketing mix.

Recognize the role of product value and the concepts of price within the marketing mix.

Identify the key elements and importance of international trade agreements.

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Definitions:

Stockholders' Equity

The residual assets of a company belonging to its shareholders after all liabilities have been deducted.

Current Assets

Assets of a business that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Financial Management

The practice of planning, organizing, directing, and controlling the financial activities such as procurement and utilization of funds of an enterprise.