The Measure of Performance Which Divides the Portfolio's Risk Premium

question 8

Multiple Choice

The measure of performance which divides the portfolio's risk premium by the portfolio's beta is the

• A) Sharpe measure.
• B) Jensen measure.
• C) Fama measure.
• D) alternative components model (MCV).
• E) Treynor measure.

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Definitions:

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a higher burden proportionally on lower-income earners.

Tax Schedules

Detailed tables or lists provided by tax authorities that outline the tax rates applicable to various levels of taxable income.

Taxable Income

The amount of an individual’s or corporation's income used to calculate how much tax they owe to the government, after deductions and exemptions.

Price Elasticities

Measures of the sensitivity of the quantity demanded or supplied of a good to a change in its price.