Assume That as a Portfolio Manager the Beta of Your

question 56

Multiple Choice

Assume that as a portfolio manager the beta of your portfolio is 1.3 and that your performance is exactly on target with the SML data under condition 1. If the true SML data is given by condition 2, how much does your performance differ from the true SML?

• A) 4.2 percent lower
• B) 3.6 percent lower
• C) 3.8 percent lower
• D) 4.2 percent higher
• E) 3.6 percent higher

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Definitions:

Statistical Categories

Classification schemes used in the collection and analysis of data to organize variables or attributes into groups.

Populations

Refers to all the inhabitants of a particular town, area, or country.

Sociologists

Social scientists who study human societies, their interactions, and the processes that preserve and change them.

Social Stratification

Refers to the way society is organized in layers, or strata.