Chapter 14

Question 1

Sharpe Ratio Calculation

Answer 1

Fund Return - T-Bill Rate (OR the risk-free rate of return) / Fund Standard Deviation

Question 2

Comparison Universe

Answer 2

To compare a mutual fund’s return with the performance if a peer group, which is made up of mutual funds with similar investment mandates

Question 3

Peer Group

Answer 3

A group of managed products (particularly mutual funds) with a similar investment mandate used in “apple to apple” analysis

Question 4

S&P/TSX Composite

Answer 4

The largest listed equities that trade on the Toronto Stock Exchange as measured by market capitalization

Question 5

S&P/TSX 60

Answer 5

The 60 largest companies that trade on the TSX as measures by market capitalization

Question 6

S&P 500

Answer 6

The 509 largest publicly held companies that trade on the U.S markets

Question 7

MSCI EAFE Index

Answer 7

The MSCI Inc. index of European, Australian and far east stocks

Question 8

FTSE Canada Universe Bond Index

Answer 8

Broad measure of the Canadian government and corporate bond market

Question 9

FTSE Canada 91-Day T-Bill Index

Answer 9

The return of 91-day Canadian Treasury Bills

Question 10

Quartile

Answer 10

Ranking used to assess performance of a fund manager relative to it’s peer group.

Question 11

Survivorship Bias

Answer 11

Termination of unsuccessful funds may result in performance universes that are biased

Question 12

Gain or Loss Calculation

Answer 12

Gain/Loss = ((Ending NAVPU-Beginning NAVPU) /Beginning NAVPU) x100