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Question 1

Sorry, that's incorrect.
The Correct Answer is Backfilling bias.
With respect to performance measurement, the bias that can occur when an index provider adds hedge funds with good track records to a database is best described as:

Question 2

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The Correct Answer is Tracking error risk.
The deviation of an exchange traded fund's (ETF's) net asset value from its underlying index's value is best described as:

Question 3

Sorry, that's incorrect.
The Correct Answer is Asset allocation.
With respect to the portfolio management process, which of the following is commonly viewed as having the greatest impact on portfolio performance?

Question 4

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The Correct Answer is Standard deviation of a randomly selected portfolio asset.
The diversification ratio is best described as the ratio of the standard deviation of an equally weighted portfolio to the:

Question 5

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The Correct Answer is Smoothed returns.

Which of the following observations most likely results from the illiquid nature of alternative assets?

Question 6

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The Correct Answer is Average market quotes.

A hedge fund consists of relatively illiquid emerging market debt that has quoted market prices available. Under most generally accepted accounting standards, the fund should report its NAV based on:

Question 7

Sorry, that's incorrect.
The Correct Answer is Treynor ratio.

Which of the following risk measures encompasses the return of an alternative asset relative to its expected systematic risk?

Question 8

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The Correct Answer is Making it easier to compare performance among firms with similar mandates.

The GIPS standards were created to provide standardized performance reporting that benefits investors by:

Question 9

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The Correct Answer is 0.40

A portfolio has a mean return of 3.0% and a coefficient of variation of 2.5. If the risk-free rate is zero, the portfolio's Sharpe ratio is closest to:

Question 10

Sorry, that's incorrect.
The Correct Answer is Equal to the money-weighted rate of return.

If an investor makes an initial deposit into an account and does not make any other deposits or withdrawals before closing the account, the investor's time-weighted rate of return on closing the account will be: