This practice question set consists of 18 pages reviewing the concepts of:

* Differentiate between time-weighted and dollar-weighted returns of a portfolio and describe their appropriate uses.

* Describe and distinguish between risk-adjusted performance measures, such as Sharpe’s measure, Treynor’s measure, Jensen’s measure (Jensen’s alpha), and information ratio and identify the circumstances under which the use of each measure is most relevant.

* Describe the uses for the Modigliani-squared and Treynor’s measure in comparing two portfolios, and the graphical representation of these measures.

* Determine the statistical significance of a performance measure using standard error and the t-statistic.

* Describe style analysis.

* Explain the difficulties in measuring the performance of actively managed portfolios.

* Describe performance manipulation and the problems associated with using conventional performance measures.

* Describe techniques to measure the market timing ability of fund managers with a regression and with a call option model, and compute return due to market timing.

* Describe and apply performance attribution procedures, including the asset allocation decision, sector and security selection decision, and the aggregate contribution.

We have also provided individual links for each question to their respective forum discussion.

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