An Active Portfolio Manager Sold $90 Million of Stocks in a Year

question 28

Multiple Choice

An active portfolio manager sold $90 million of stocks in a year. If the portfolio had an average value of $110 million in assets under management what is the portfolio turnover ratio?

• A) 22.2 percent
• B) 81.8 percent
• C) 90.0 percent
• D) 110.0 percent
• E) 122.2 percent

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Definitions:

Safety Inventory

Additional stock kept beyond expected demand to protect against variability in market demand or supply chain disruptions.

Normally Distributed

Refers to a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Standard Deviation

A statistical metric that quantifies the dispersion or spread of a dataset relative to its mean, indicating consistency or variability.

Echelon Inventory

The stock held across different stages of the supply chain, considering the inventory at all levels together.