Wealth-Forum e-zine

Test your understanding of this topic

Q1.

Difference between the portfolio return and the benchmark return is termed as:

a. negative active return

b. active return

c. positive active return

d. none of the above

Q2.

What will be interaction effect if a sector is overweighted on under-performing securities?

a. Positive

b. Negative

c. Nil

Q3.

The active return consists

a. Selection Effect

b. Allocation Effect

c. Interaction Effect

d. All of the above

Q4.

Interaction Effect is a combined effect of Allocation and Selection effects.

a. True

b. False

Q5.

The impact is positive, when,

a. Under-weighing out-performing sectors

b. Overweighing out-performing sectors

c. Over-weighing under-performing sectors