CFP

Risk and Return Measures - Sample Questions 16 - 20

  1. The coefficient of determination may be used:
    1. As one of several tools of performance attribution.
    2. To gauge an investment's level of risk.
    3. To determine the degree to which two investments are correlated.
    4. None of the foregoing.
  2. Beta measures:
    1. Total Risk.
    2. Market Risk.
    3. Central tendency.
    4. Skewness.
  3. Blair Group's mean return is 8.37%. Its standard deviation is 2.45%. From the foregoing, one could infer that:
    1. Two thirds of the time, the return range would be 13.27% to 3.47%.
    2. 99% of the time, the return range would be from 8.37% to 2.45%.
    3. 95% of the time, the return range would be from 16.47% to 4.9%.
    4. None of the foregoing.
  4. With respect to skewness:
    1. It is a measure of kurtosis.
    2. It measures the degree of asymmetry of return distributions.
    3. It measures the degree of central tendency.
    4. Both a. and c.
  5. If the R2 between ? Corporation and the Russell 1000 Value is 87%, one may interpret this result as follows:
    1. One may attribute 87% of ?'s return to unsystematic risk.
    2. One may interpret 13% of ?'s return to unsystematic risk.
    3. One may interpret 87% of ?'s return to systematic risk embodied in the Russell 1000 Value.
    4. Both b. and c.


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