INVESTMENTS THIRTEENTH EDITION ALL
CHAPTERS 2026 PRACTICE TEST SHEET FULL
SOLUTIONS CORRECT ANSWERS
GUARANTEED PASS
◉ 2. The unadjusted total percentage return on a security that has
not been
compared to any benchmark is
referred to as which one of the following?
A. raw return
B. indexed return
C. real return
D. marginal return
E. absolute return
See Section 13.1.
Answer: A
◉ 4. Which one of the following is computed by dividing a portfolio's
risk
premium by the portfolio beta?
A. raw return
,B. Value at Risk
C. Jensen's alpha
D. Sharpe ratio
E. Treynor ratio
See Section 13.1.
Answer: E
◉ 5. Which one of the following measures a portfolio's raw return
against the
expected return based on the
Capital Asset Pricing Model?
A. Sharpe ratio
B. Treynor ratio
C. Jensen's alpha
D. beta
E. Value at Risk
See Section 13.1.
Answer: C
◉ 6. Which one of the following concerns a money manager's
control over
investment risks, particularly
,potential short-run losses?
A. Alpha management
B. Normal distribution management
C. Investment risk management
D. Raw return distributions
E. Volatility performance measures
See Section 13.3.
Answer: C
◉ Blooms: Knowledge
7. Which one of the following assesses risk by stating the probability
of a loss
a portfolio might incur
within a stated time period given a specific probability?
A. Sharpe ratio
B. Jensen's alpha
C. Treynor ratio
D. raw return measurement
E. Value-at-Risk
See Section 13.3.
Answer: E
, ◉ 8. Which one of the following is a statistical model, defined by its
mean and
standard deviation, that is
used to assess probabilities?
A. variance
B. normal distribution
C. efficient frontier
D. Value at Risk
E. Jensen's alpha
See Section 13.3.
Answer: B
◉ 9. Which one of the following measures a security's return in
relation to the
total risk associated with that
security?
A. beta
B. Jensen's alpha
C. Sharpe ratio
D. Treynor ratio
E. Value at Risk
See Section 13.1.
CHAPTERS 2026 PRACTICE TEST SHEET FULL
SOLUTIONS CORRECT ANSWERS
GUARANTEED PASS
◉ 2. The unadjusted total percentage return on a security that has
not been
compared to any benchmark is
referred to as which one of the following?
A. raw return
B. indexed return
C. real return
D. marginal return
E. absolute return
See Section 13.1.
Answer: A
◉ 4. Which one of the following is computed by dividing a portfolio's
risk
premium by the portfolio beta?
A. raw return
,B. Value at Risk
C. Jensen's alpha
D. Sharpe ratio
E. Treynor ratio
See Section 13.1.
Answer: E
◉ 5. Which one of the following measures a portfolio's raw return
against the
expected return based on the
Capital Asset Pricing Model?
A. Sharpe ratio
B. Treynor ratio
C. Jensen's alpha
D. beta
E. Value at Risk
See Section 13.1.
Answer: C
◉ 6. Which one of the following concerns a money manager's
control over
investment risks, particularly
,potential short-run losses?
A. Alpha management
B. Normal distribution management
C. Investment risk management
D. Raw return distributions
E. Volatility performance measures
See Section 13.3.
Answer: C
◉ Blooms: Knowledge
7. Which one of the following assesses risk by stating the probability
of a loss
a portfolio might incur
within a stated time period given a specific probability?
A. Sharpe ratio
B. Jensen's alpha
C. Treynor ratio
D. raw return measurement
E. Value-at-Risk
See Section 13.3.
Answer: E
, ◉ 8. Which one of the following is a statistical model, defined by its
mean and
standard deviation, that is
used to assess probabilities?
A. variance
B. normal distribution
C. efficient frontier
D. Value at Risk
E. Jensen's alpha
See Section 13.3.
Answer: B
◉ 9. Which one of the following measures a security's return in
relation to the
total risk associated with that
security?
A. beta
B. Jensen's alpha
C. Sharpe ratio
D. Treynor ratio
E. Value at Risk
See Section 13.1.
