The Inventory Turnover Rate for a Firm Is 14

question 63

Multiple Choice

The inventory turnover rate for a firm is 14.5 as compared to the relevant industry rate of 13.2. In this case, the firm is

• A) selling its inventory slower than the industry.
• B) underperforming the industry.
• C) averaging less days of sales in inventory than the industry.
• D) generating less sales per dollar of inventory.

---

Definitions:

Benchmark Risk

The risk associated with not being able to meet or exceed the performance of a benchmark index or standard.

Treynor-Black Portfolio

A portfolio optimization model that blends a passive (market index) portfolio and an actively managed portfolio to achieve superior returns.

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.