Which One of the Following Statements Is Correct If a Portfolio

question 75

Multiple Choice

Which one of the following statements is correct if a portfolio has a Jensen measure of return of zero?

• A) The portfolio has a total return of zero percent.
• B) The portfolio earned exactly its expected return on a risk-adjusted basis.
• C) The portfolio outperformed the market on a risk-adjusted basis.
• D) The market provides a better return on a risk-adjusted basis.

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Definitions:

Average Variable Cost

The total variable costs (costs that change with the amount of output produced) divided by the quantity of output produced.

Fixed Cost

Costs that do not vary with the level of output or activity, such as rent or salaries.

Marginal Cost

The increased cost incurred from making one more unit of a product or service.

Average Total Cost

The total cost divided by the quantity of output produced, representing the average cost per unit of output.