To select: In the performance evaluation of hedge funds, the most relevant statement for explaining problems of survivorship bias and backfill bias. Introduction: Survivorship bias means non-performing securities are excluded and reported which lead to a change in an index. Backfill bias means performing securities included and reported in the index which leads to change in an index.

Question

Want to see the full answer?

Answer 1

Question

Chapter 26, Problem 4PS

Summary Introduction

To select:

In the performance evaluation of hedge funds, the most relevant statement for explaining problems of survivorship bias and backfill bias.

Introduction:

Survivorship bias means non-performing securities are excluded and reported which lead to a change in an index.

Backfill bias means performing securities included and reported in the index which leads to change in an index.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Andres Michael bought a new boat. He took out a loan for $23,600 at 3.25% interest for 3 years. He made a $4,120 partial payment at 3 months and another partial payment of $3,440 at 6 months. How much is due at maturity?

On May 3, 2020, Leven Corporation negotiated a short-term loan of $840,000. The loan is due October 1, 2020, and carries a 6.60% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.)

Nolan Walker decided to buy a used snowmobile since his credit union was offering such low interest rates. He borrowed $4,300 at 3.75% on December 26, 2021, and paid it off February 21, 2023. How much did he pay in interest? (Assume ordinary interest and no leap year.) (Use Days in a year table.)