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Finding Alpha — Quiz

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We've shown 2 questions below as a teaser. 6 more questions unlock with a free account, plus instant grading, explanations citing the module section, and a certificate when you pass.

Question 1 (teaser)

Alpha is best understood as:

1. Total return of a fund 2. Return above the appropriate benchmark, after adjusting for the fund's factor exposures 3. Year-on-year change in NAV 4. The fund's expense ratio

Question 2 (teaser)

Sharpe's arithmetic of active management says, before fees:

1. The average active manager beats the market 2. Active managers, in aggregate, must earn the market return — because they collectively are the market 3. Active managers always lose money 4. Active management is a zero-sum game where the average wins