A Portfolio Manager Uses Two Different Proxies for the Market

question 92

Multiple Choice

A portfolio manager uses two different proxies for the market portfolio, the S&P 500 index, and the MSCI World index. Differences in the manager's portfolio performance resulting from the different market portfolios is referred to as

• A) the size effect.
• B) the market effect.
• C) measurement error.
• D) benchmark error.
• E) manager's performance error.

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Definitions:

Conformity

The adjustment of one's behaviors, attitudes, or beliefs to match those of the group or to meet group standards.

Propinquity

The physical or psychological proximity between people, influencing their likelihood of forming relationships.

Deindividuation

A psychological state of decreased self-evaluation, causing people to ignore usual restraints in the group setting.

Anticonformity

Anticonformity describes behavior that goes against or opposes the norms or standards of a group intentionally, often to maintain a sense of individuality.