1 a manager of an indexed portfolio of stocks is successful, Ask an Expert

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1. A manager of an indexed portfolio of stocks is successful when:

A. his portfolio produces superior returns than the benchmark index return

B. the return of his portfolio matches the return of the S$P 500 index

C. the return of his portfolio replicates the return of the stock index against which his portfolio is benchmarked

D. the return of his portfolio is superior to the return of the stock index against which the portfolio is benchmarked

E. A and D

2. To estimate the Alpha of a security using the Capital Asset Pricing Model, you need to run a linear regression where your dependant variable is the ___________ and your independent variable is the ______________

A. individual security risk premium, beta of a security

B. market risk premium, individual security risk premium

C. beta of the security, individual security risk premium

D. individual security risk premium, market risk premium

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92725053

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