Test 3

Question 1

NAV

Answer 1

(assets - liabilities) / shares outstanding

Question 2

Total Return

Answer 2

(end - beg + income) / beg

Question 3

Total Return with Reinvestment

Answer 3

(end market value - beg market value) / beg market value

Question 4

Dollar Cost Averaging average price

Answer 4

total NAV / n

Question 5

Dollar Cost Averaging average cost

Answer 5

total investment / total shares

Question 6

Turnover Ratio

Answer 6

lesser of purchases or sales / average daily sales

Question 7

Sharpe Ratio

Answer 7

(Rp - Rf) / SDp

Question 8

Treynor Ratio

Answer 8

(Rp - Rf) / Beta

Question 9

Sortino Ratio

Answer 9

(Rp - Rf) / SDd

Question 10

Jensen’s Alpha

Answer 10

Rp - [Rf - Beta(Rm - Rf)]

Question 11

Expected Return

Answer 11

SUM (possible returns * probability of it occurring)

Question 12

Standard Deviation

Answer 12

SQRT[ SUM( prob * (return -ER)^2) ]

Question 13

Standard Deviation of a Portfolio

Answer 13

SQRT[ (w1)^2 * (sd2)^2 + (w2)^2 * (sd2)^2 + 2(w1)(w2)COV

Question 14

Coefficient of Variation (CV)

Answer 14

sd / mean

Question 15

Correlation Coefficient (CORR)

Answer 15

COV / [(sd1)(sd2)]

Question 16

Covariance (COV)

Answer 16

[ SUM[ (return1 * avg1) + (return2 * avg2)]] / (n - 1)

Question 17

Beta

Answer 17

CORR * (sdi / sdm)

Question 18

Minimum Variance Portfolio

Answer 18

[sd2)^2 - (sd1)(sd2)CORR] / [ sd1 + sd2 - 2(sd1)(sd2)CORR]

Question 19

Cumulative Return

Answer 19

end/beg -1

Question 20

Portfolio Weighted Return

Answer 20

SUM (return * weight)

Question 21

R-Squared

Answer 21

CORR^2