Portfolio Managers Paul Martin and Kevin Krueger Each Manage $1,000,000

question 11

Multiple Choice

Portfolio managers Paul Martin and Kevin Krueger each manage $1,000,000 funds.Paul Martin has perfect foresight and the call option value of his perfect foresight is $150,000.Kevin Krueger is an imperfect forecaster and correctly predicts 50% of all bull markets and 70% of all bear markets.The correct measure of timing ability for Kevin Krueger is __________.

• A) 20%
• B) 60%
• C) 75%
• D) 120%

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Definitions:

Linguistic Performance

The behavior or responses actually produced by a cognitive processor engaged in a particular cognitive activity involving language. Contrast with linguistic competence.

Linguistic Relativity

The hypothesis that the structure of a language affects its speakers' world view or cognition, and thus people's perceptions are relative to their spoken language.

Bilinguals

Individuals who have the ability to communicate fluently in two distinct languages.

Trilinguals

Individuals who are fluent in three languages.