Question: We evaluate the selection ability and the market timing ability of active portfolio managers using the scatter plot of the excess return of the portfolio

We evaluate the selection ability and the market timing ability of active portfolio managers using the scatter plot of the excess return of the portfolio against the excess return of the market portfolio. The intercept of the curve measures the selection ability of active portfolio managers and the slope of the curve in the 1st quadrant measures the market timing ability of active portfolio managers. Is the above statement true or false?

A. True

B. False

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!