In Returns-Based Style Analysis, a Coefficient of Determination of 95

question 10

Multiple Choice

In returns-based style analysis, a coefficient of determination of 95 percent would suggest that

• A) the portfolio manager outperformed 95 percent of his peers.
• B) the portfolio manager was outperformed by 95 percent of his peers.
• C) 95 percent of the portfolio return variability could be attributed to portfolio style.
• D) 95 percent of the portfolio return variability could be attributed to stock selection skills.
• E) 5 percent of the portfolio return variability could be attributed to portfolio style.

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Definitions:

Vaccine-preventable Disease

Illnesses for which effective immunizations exist, allowing for their prevention through vaccination.

Synapse

The intersection or gap between the axon of one neuron and the dendrites of other neurons; the gap that neurotransmitters must cross.

Synaptogenesis

The process of formation of synapses between neurons in the nervous system, crucial for learning and memory.

Prefrontal

Pertaining to the prefrontal cortex of the brain, involved in complex behaviours including decision making and planning.