Excess Return Portfolio Performance Measures

question 40

Multiple Choice

Excess return portfolio performance measures

• A) adjust portfolio risk to match benchmark risk.
• B) compare portfolio returns to expected returns under CAPM.
• C) evaluate portfolio performance on the basis of return per unit of risk.
• D) indicate historic average differential return per unit of historic variability of differential return.
• E) the average market beta per unit of risk.

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Definitions:

Double-Entry Bookkeeping

An accounting method where every entry to an account requires a corresponding and opposite entry to a different account, ensuring the accounting equation balances.

Posting

The transfer of information from one record to another. This might be an automated process, depending on the electronic system in place.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Money owed by a company to its creditors for purchases of goods and services, recorded as a liability on the balance sheet.