1- The first step of performance evaluation is: A attributing performance. B measuring relative returns. C measuring absolute returns. 2 - The Sharpe ratio is used in the performance evaluation process to: A adjust return for risk. B attribute performance. C measure absolute returns. 3- The measurement of relative returns involves comparing the fund manager?s holding-period return with: A a measure of risk. B the return on a benchmark. C the fund manager?s past performance. Homework 4- The measure that best reflects the variability of returns around the mean return is the: A standard deviation. B reward-to-risk ratio. C downside deviation. 5- The measure that is best suited for investors who dislike losses more than they like equivalent gains is the: A Sharpe ratio. B standard deviation. C downside deviation. 6- Standard deviation is a measure of the variability of a fund's return: A relative to its average return. B relative to a benchmark return. C below its average return. 7- The Sharpe ratio is a measure of: A historical volatility. B downside deviation. C risk-adjusted performance. 8- The Sharpe ratio is a measure of the excess return on a portfolio compared with the: A beta of portfolio returns. B portfolio?s tracking error. C standard deviation of portfolio returns. 9- The criterion that a benchmark should be made up of assets that can be bought or sold by the fund manager is known as: A investability B compatibility C pre-specification. Homework 10-A fund manager who uses analytical and trading skills to try to beat a bench- mark is best described as a(n): A active manager. B index replicator. C passive manager. . 11- Tracking error for a passive investment fund is most likely: A lower than the tracking error for an active investment fund. B equal to the tracking error for an active investment fund. C higher than tracking error for an active investment fund. . 12- The consistent outperformance of an investment fund compared with its bench- mark is best described as: A beta. B alpha. C tracking error