"Active Investment Management May Generate Additional Returns at Times of About

question 19

Multiple Choice

"Active investment management may generate additional returns at times of about 0.1%.However,the standard deviation of the typical well diversified portfolio is about 20%,so it is very difficult to statistically identify any increase in performance." Even if true,this statement is an example of the _________ problem in deciding how efficient the markets are.

• A) magnitude
• B) selection bias
• C) lucky event
• D) allocation

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Definitions:

Work Sampling

A statistical technique used to estimate how much time workers spend on various activities during their workday.

Disadvantages

Negative or less favorable aspects of a situation, plan, or product that may act as hurdles or drawbacks.