Which of the Following Is Not One of the Guidelines

question 64

Multiple Choice

Which of the following is not one of the guidelines for including/excluding variables in a regression equation?

• A) Look at t-value and associated p-value
• B) Check whether t-value is less than or greater than 1.0
• C) Variables are logically related to one another
• D) Use economic or physical theory to make decision
• E) All of these options are guidelines

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Definitions:

Jensen Alpha

A performance metric that represents the average return on a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM), based on the market risk.

Performance

The evaluation of the returns provided by an investment over a certain period in relation to its risk.

Portfolio Manager's Ranking

A rating or ranking system used to evaluate the performance of a portfolio manager, often based on factors such as return on investment, risk management, and adherence to investment strategy.

Comparison Universe

A benchmark or set of comparable entities or investments used to evaluate the performance of a particular asset or portfolio.