Excess Return Portfolio Performance Measures

question 46

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) None of the above.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account designed to predict the value of receivables that are expected to be uncollectible.

Direct Method

A cash flow statement preparation approach that lists major cash receipts and payments during the period.

Bad Debts Recovered

Previously written off debts that have unexpectedly been collected.

Allowance Method

An accounting technique used to estimate and account for bad debts, allowing companies to anticipate uncollectible accounts receivables.