Question

What does a positive value of Fama's Net Selectivity Ratio indicate?

a.

Successful selection of the right stocks for the portfolio

b.

Poor performance of the portfolio manager

c.

Excessive risk in the portfolio

d.

Consistent underperformance of the fund

Answer: (a).Successful selection of the right stocks for the portfolio Explanation:A positive value of Fama's Net Selectivity Ratio implies that the portfolio manager has been successful in selecting the right stocks for the portfolio.

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Q. What does a positive value of Fama's Net Selectivity Ratio indicate?

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