If You Go to a Beach in the Continental United

question 56

Multiple Choice

If you go to a beach in the continental United States and you are standing on a long,flat strand of sand,and you look away from the open ocean and see only a few low sand dunes and then a large,open waterway,where are you?

• A)on a surfing beach in California
• B)on a the Oregon coast at the mouth of river
• C)on a barrier island on the Florida Gulf Coast
• D)You must be on a Pacific Island; there is nothing like that on U.S.coastlines.

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Definitions:

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment portfolio, by comparing its excess returns to the volatility of those returns.

Active Portfolio Managers

Investment professionals who make regular buy, hold, and sell decisions in an attempt to outperform standard benchmarks.

Active Portfolio

An investment portfolio actively managed by a portfolio manager or investor aiming to outperform a benchmark index through regular buying and selling of securities.

Systematic Risk

This refers to the inherent risk that affects the entire financial market or a whole market segment, unpreventable through diversification.