In Returns-Based Style Analysis a Coefficient of Determination of 95

question 8

Multiple Choice

In returns-based style analysis a coefficient of determination of 95% would suggest that

• A) the portfolio manager outperformed 95% of his peers.
• B) the portfolio manager was outperformed by 95% of his peers.
• C) 95% of the portfolio return variability could be attributed to portfolio style.
• D) 95% of the portfolio return variability could be attributed to stock selection skills.
• E) 5% of the portfolio return variability could be attributed to portfolio style.

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Definitions:

Analyze

To examine something in detail in order to understand it better or to ascertain its components.

Diagnose

The process of identifying and understanding problems, conditions, or situations based on the symptoms or data presented.

Archetypes

Symbolic representations or typical examples of certain behaviors, personalities, or patterns that are universally recognized and understood.

Adaptive Leadership

A leadership approach that emphasizes the ability to adapt to changing environments and situations by being flexible and innovative.