Discuss about the manager and benchmark returns

Assignment Help Finance Basics
Reference no: EM131736919

Question: Suppose we can observe and measure with perfect accuracy the quarterly total returns obtained by both a manager and her appropriately defined benchmark. Suppose further that these returns are independent across time in both cases (that is, they lack serial correlation, like stock market returns). Suppose both the manager and the benchmark have quarterly return volatility (standard deviation across time) equal to 3%. And suppose the correlation between the manager and benchmark returns is þ 75%. By how much must the manager's five-year average quarterly return exceed that of her benchmark in order to be able to conclude with usual statistical significance that the manager's performance differential was not just a random outcome?

Reference no: EM131736919

Questions Cloud

Describe what evidence supports the main point : Describe what evidence supports the main point? What is your opinion of the article? Do you agree with the author's findings?
Discuss their ideas about religion and equality : Compare and contrast the works of Woolman, Occum, & Edwards; Discuss their ideas about religion and equality
Equilibrium expected total return risk premium on property : Suppose the risk-free interest rate is 3% and the equilibrium expected total return risk premium on property investments is 3.5%.
Write an essay describing a local crime prevention program : Write a 1,050- to 1,400-word essay describing a local crime prevention program. What is good about it and what is bad about it?
Discuss about the manager and benchmark returns : Suppose both the manager and the benchmark have quarterly return volatility (standard deviation across time) equal to 3%.
Prefer the security of working for salaries : Many people who work in sales feel that working on commission is the best way to maximize their incomes. Others prefer less pressure to
Prepare a direct materials purchases budget for product x : Prepare a direct materials purchases budget for Product X, assuming that there are no beginning or ending inventories for direct materials
Identify a local drug treatment and prevention program : identify a local drug treatment and/or prevention program in your community, such as a treatment facility, specific prevention program in a school system.
Should the company accept or reject the order : Assume that the company would accept the order only if it increased total profits. Should the company accept or reject the order? Provide supported computations

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the interest earned on the savings account after

a friend has 2400 that she has saved from her job. she will need her money plus any interest earned on it in six

  Annual after-tax required lease income

Leases R Us, Inc. (LRU) has been contracted by Robotics of Beverly Hills (RBH) to provide lease financing for a machine that would assist in automating a large part of their current assembly line. Compute the amount to be amortized? Compute the ann..

  Estimating sustainable growth problems

Estimating Sustainable Growth Problems: how to solve sustainable growth problems?

  Expansion project that requires

Quad enterprises is considering a new 3 year expansion project that requires an initial fixed asset investment of 2.94M.

  You invest in an ordinary annuity of 3000 annually at 7

you invest in an ordinary annuity of 3000 annually at 7 annual interest. what is the future value of the annuity at

  Calculate the value of each of the bonds shown in the follow

Calculate the value of each of the bonds shown in the following table, all of which pay interest annually.

  What distinguishes a partnership from a corporation

What distinguishes a partnership from a corporation? What is limited liability?- How does income get taxed twice in the case of a corporation?

  What are the quotas for a sample of 2,000 readers

What are the quotas for a sample of 2,000 readers? Design a spreadsheet to find the quotas in each category for different sample sizes.

  What is one thing that you have learned about public finance

What is one thing that you have learned about public finance and budgeting that you want to make sure you carry forward into a career in public administration?

  Charge of pricing company''s product

Suppose you are in charge of pricing your company's product. Fortunately, the marketing department has already identified the conditions you will face next period. If you charge $90 per unit, you will sell 112,426 units, but will run out of inventory..

  Interest expense and net income

Last year a company had $365,000 of assets, $28,275 of net income, and a debt-to-total-assets ratio of 42%. However, the president is convinced to increase the debt ratio to 54%. Sales and total assets will not be affected, but interest expenses w..

  The company will collect box ofce receipts for opening

a movie company wishes to measure the effect of advertising on box of?ce receipts. thirty u.s. cities with similar

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd