When Testing Mutual Fund Performance Over Time One Must Be

question 35

Multiple Choice

When testing mutual fund performance over time one must be careful of ___________,which means that a certain percentage of poorer performing funds fail over time which makes the performance of remaining funds seem more consistent over time.

• A) survivorship bias
• B) lucky event bias
• C) magnitude bias
• D) mean reversion bias

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Definitions:

Separate And Apart

A legal term often used in divorce proceedings, indicating spouses are living physically apart and leading separate lives.

Joint And Several

A legal term referring to the liability shared by two or more parties, where each party is individually responsible for the entire obligation, as well as collectively with the others.

Corporate Veil

A legal concept that separates the personal liability of shareholders and officers from that of the corporation itself.

Artificial Legal Person

A non-human entity that is given legal rights and responsibilities, such as a corporation or a government body.