Which activity focuses on calculating the portfolio’s return over a defined evaluation period?

Select all of the strong bases.

In the context of market-efficiency beliefs, a purely passive strategy assumes that:

Which defining feature distinguishes a strategic asset allocation strategy from a dynamic one?

Which statistical moment measures the dispersion of returns around the mean?

Essay You are an investment-consulting analyst responsible for advising a search committee that is hiring one or two external U.S. large-cap equity managers for a $5 billion pension fund. The committee’s stated objective is to keep total active risk within 1.5% predicted tracking error while preserving a market-like return profile. During the short-list discussion, one committee member insists that selecting the lowest-beta candidate (β ≈ 0.80) “automatically keeps active risk in check.” Several other candidates have betas much closer to 1.00 but exhibit lower predicted tracking error. As the consulting analyst, you must prepare a concise position paper for the committee that clarifies why beta alone is an incomplete proxy for active risk. Question Write a position paper that addresses the following: What is meant by active return and active risk? What is the difference between Beta and Tracking Error Explain why a portfolio can have a low beta yet still exhibit substantial active risk.

Mean-variance optimization requires that asset-class weights:

Essay Question 5 (worth 9 points) Issuer: Delta Industrial HoldingsRating: AAA (Fitch)Maturity: 15 years (due September 1, 2039)Coupon: 4.5% fixed, paid semiannuallyYield to Maturity: 5.2%Issue Price: 110.00Call Feature: None (option-free)Put Feature: NoneEmbedded Options: NoneStated Duration: 22 yearsBenchmark Treasury: 3.5% (10-year maturity reference) A bond salesperson tells you the following: Comparable AAA-rated bonds are trading at a spread of 50 basis points over the Treasury benchmark. Identify at least three objective errors or inconsistencies in this bond offering and explain why they would concern a professional investor.

In the Fama-French three-factor model, the “HML” factor captures:

The Carhart four-factor model adds which factor to the Fama-French three-factor model?