1. Which one of the following assesses the ability of a money manager to balance high returns with an acceptable level of risk?

1.    Which one of the following assesses the ability of a money manager to balance high returns with an acceptable level of risk?

 

A.     probability analysis

B.     raw return ratio

C.     risk assessment

D.     performance evaluation

E.     market analysis

 

2.    The unadjusted total percentage return on a security that has not been compared to any benchmark is referred to as which one of the following?

 

A.     raw return

B.     indexed return

C.     real return

D.     marginal return

E.     absolute return

 

3.    The risk premium of a portfolio divided by the portfolio's standard deviation defines which one of the following performance measures?

 

A.     raw return

B.     Value at Risk

C.     Jensen's alpha

D.     Sharpe ratio

E.     Treynor ratio

 

4.    Which one of the following is computed by dividing a portfolio's risk premium by the portfolio beta?

 

A.     raw return

B.     Value at Risk

C.     Jensen's alpha

D.     Sharpe ratio

E.     Treynor ratio

 

5.    Which one of the following measures a portfolio's raw return against the expected return based on the Capital Asset Pricing Model?

 

A.     Sharpe ratio

B.     Treynor ratio

C.     Jensen's alpha

D.     beta

E.     Value at Risk

 

6.    Which one of the following concerns a money manager's control over investment risks, particularly potential short-run losses?

 

A.     Alpha management

B.     Normal distribution management

C.     Investment risk management

D.     Raw return distributions

E.     Volatility performance measures

 

7.    Which one of the following assesses risk by stating the probability of a loss a portfolio might incur within a stated time period given a specific probability?

 

A.     Sharpe ratio

B.     Jensen's alpha

C.     Treynor ratio

D.     raw return measurement

E.     Value-at-Risk

 

8.    Which one of the following is a statistical model, defined by its mean and standard deviation, that is used to assess probabilities?

 

A.     variance

B.     normal distribution

C.     efficient frontier

D.     Value at Risk

E.     Jensen's alpha

 

9.    Which one of the following measures a security's return in relation to the total risk associated with that security?

 

A.     beta

B.     Jensen's alpha

C.     Sharpe ratio

D.     Treynor ratio

E.     Value at Risk

 

10.    The Sharpe ratio measures a security's return relative to which one of the following?

 

A.     total risk

B.     diversifiable risk

C.     market rate of return

D.     risk-free rate

E.     systematic risk

                                        

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