A Fund Has Excess Performance of 1

question 24

Multiple Choice

A fund has excess performance of 1.5%.In looking at the fund's investment breakdown you see that the fund overweighed equities relative to the benchmark and the average return on the fund's equity portfolio was slightly lower than the equity benchmark return.The excess performance for this fund is probably due to _______________.

• A) security selection ability
• B) better sector weightings in the equity portfolio
• C) the asset allocation decision
• D) finding securities with positive alphas

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Definitions:

Sales

The activities related to selling or the amount of goods or services sold in a given time period.

Confidence Interval

A range of values, derived from a data set, that is likely to contain the true value of an unknown population parameter.

Income

Money received by an individual or business in exchange for providing a good or service or through investing capital.

Multiple Regression

A mathematical method for modeling the connection between a single dependent variable and multiple independent variables.