The Asset Management Process is...
Ans: Gather data, Establish goals, Analyze information, Make recommendations
and implement, monitor performance
Required Rate of return formula =
Ans: (e)r = Rf + (Rm-Rf)Bp
What is Excess Return ?
Ans: Total Portfolio Return - Risk Free Rate
Explain Jensen...
AAMS Exam Questions and Correct Answers The Asset Management Process is... Ans: Gather data, Establish goals, Analyze information, Make recommendations and implement, monitor performance Required Rate of return formula = Ans: (e)r = Rf + (Rm -Rf)Bp What is Excess Re turn ? Ans: Total Portfolio Return - Risk Free Rate Explain Jensen performance ratio? Ans: This measure of performance is a measure of absolute risk, meaning it can be used as a stand -alone measure as apposed to a relative measure (one that compares) Treynor ratio uses what to measure risk? Ans: beta Sharpe ratio uses what to measure risk ? Ans: Standard Deviation Treynor formula? Ans: Ti = Excess return / portfolio beta Sharpe ratio formula? Ans: = Total Portfolio return - Rfr / standard deviation The Treynor ratio output shows what...? Ans: It shows how much return each fund generated per one unit of risk Treynor measure is only appropriate for what type of portfolios? and why? Ans: fully diversified portfolios; because it uses beta as its measure of risk, and beta is a systemic type of risk (market risk) exce ss return is what? Ans: total portfolio return - Rfr T or F: Indexes assume that all dividends and distributions are reinvested. Ans: true What is risk in terms of investing? Ans: The degree of uncertainty associated with return of an asse t. Required rate of return formula is AKA as what...? Ans: CAPM pricing model What are the three key elements of an investment strategy? Ans: an identifiable goal, a method to attain that goal, and the competencies and resources to sustain the strategy What are the three categories of EMH? Ans: Weak Form, Semi -Strong form, and the strong form.
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