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Treynor's Performance Measure Implicitly Assumes a Completely Diversified Portfolio

question 22

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Treynor's performance measure implicitly assumes a completely diversified portfolio.


Definitions:

Independent Samples

Samples drawn from two populations in such a way that the selection of a sample from one population does not influence the selection of a sample from the other population.

Standard Error

A statistical measure that estimates the accuracy of a sample mean by describing the dispersion of sample means around the population mean.

Sample Mean Difference

The difference between the mean values of two samples drawn from the same or different populations.

Population Means

The average value of a particular characteristic in the entire population.

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