Question 3 of 9
What are quantitative measures of fund manager performance used for?
A
To determine the fund manager's salary.
B
To evaluate the effectiveness of the fund manager's investment decisions.
C
To calculate the scheme's Net Asset Value (NAV).
D
To decide on the asset allocation strategy.
Correct Option:
B
Explanation
Quantitative performance measures, such as the Sharpe ratio, alpha, beta, and information ratio, are used to evaluate how effectively a fund manager has generated returns relative to the level of risk taken and the applicable benchmark.
