Suppose That Over the Same Time Period Two Portfolios Have

question 22

Multiple Choice

Suppose that over the same time period two portfolios have the same average return and the same standard deviation of return,but portfolio A has a higher beta than portfolio B. According to the Sharpe measure, the performance of portfolio A __________.

• A) is better than the performance of portfolio B
• B) is the same as the performance of portfolio B
• C) is poorer than the performance of portfolio B
• D) cannot be measured since there is no data on the alpha of the portfolio

Identify transactions that are considered noncash investing and financing activities and understand their disclosure.

Recognize examples of cash flows from operating activities.

Know the difference between direct and indirect methods for preparing the operating activities section of the statement of cash flows.

Understand how cash flows from financing activities are reported.