If All ___ Are ___ in the Treynor-Black Model,there Would

question 32

Multiple Choice

If all ___ are ___ in the Treynor-Black model,there would be no reason to depart from the passive portfolio.

• A) alphas; zero
• B) alphas; positive
• C) betas; positive
• D) standard deviations; positive

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Definitions:

Net Operating Income

The total income from operations of a company before taxes and interest deductions.

Variable Costing

An accounting strategy that only accounts for variable production expenditures (direct materials, direct labor, and variable manufacturing overhead) in product pricing.

Unit Product Cost

The total cost (both direct and indirect) to produce a single unit of product, often used to set selling prices and assess profitability.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a product.