Dissatisfaction with the traditional performance measures has led to the development of a new generation of performance measures such as

A) Market timing measures
B) The information ratio
C) The index tracking
D) None of these choices

Question

Dissatisfaction with the traditional performance measures has led to the development of a new generation of performance measures such as

A) Market timing measures
B) The information ratio
C) The index tracking
D) None of these choices

Quizplus · Accepted Answer

Recall from Chapter 19 that fund managers may add new value through active management such as market timing.The advantage of the model (refer to equation 20.14)is that it allows performance to be broken into the two components - stock selection and market timing.

Dissatisfaction with the Traditional Performance Measures Has Led to the Development