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✅ FINAL ANSWERS IN EXACT SAME FORMAT

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1. Question 1
   The “Sharpe Ratio” is:

✔️ A revenue metric divided by a risk metric
❌ A risk metric
❌ A risk metric divided by a revenue metric
❌ A revenue metric

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2. Question 2
   Actual CPC divided by the conversion rate is:

✔️ Acquisition Cost
❌ Quality Score
❌ Maximum Cost per Click-through
❌ Ad Rank

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3. Question 3
   Which of the following is NOT a demographic for targeted ads?

✔️ Future Customer
❌ Income
❌ Level of education
❌ Age
❌ Location by zip code
❌ Member of Vegetarian Interest Group Facebook page

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4. Question 4
   “Organic link” means visitor came from:

✔️ An unpaid listing of our website returned in search results
❌ Directly typing the URL
❌ Clicking a sponsored link
❌ Clicking a blog/article link

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5. Question 5
   SEO steps (Select all):

✔️ Increase social signal (likes, retweets)
✔️ Get authoritative sites to mention us and link
✔️ Make sure content is current, relevant, substantive
❌ Increase links from all possible third-party websites

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6. Question 6
   IRR must be used when:

✔️ Cash is invested at several different times
❌ Necessary to compare two different returns
❌ Necessary to annualize the return
❌ Many methods exist but one is preferred

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7. Question 7
   Why know both return & volatility?

✔️ Returns can be increased through leverage but volatility increases equally, so returns must not be judged alone
❌ Volatility is a measure of risk and avoiding risk is the main goal
❌ Higher volatility = lower returns
❌ Higher volatility = higher returns

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8. Question 8
   Why is relying on LTV risky?

✔️ It ignores the high negative cash flow during initial customer acquisition
❌ LTV is a profitability metric, not a risk metric
❌ LTV is difficult to calculate
❌ Only useful if CPC ÷ conversion < LTV

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9. Question 9
   Borrowing money increases target return but also:

✔️ Increases volatility at the same rate it increases excess returns
❌ Requires a more skilled manager
❌ Inversely affects discrete return
❌ None of the above

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10. Question 10
    NOT included in expense ratio:

✔️ The manager’s performance bonus
❌ Operating expenses associated with marketing
❌ Brokerage fees
❌ Lawsuit-related costs

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11. Question 11
    If managers pick portfolios randomly, % outperforming before fees:

✔️ 50%
❌ 10%
❌ 28%
❌ 80%

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12. Question 12
    Why is large tracking error undesirable?

✔️ It implies wide variation from the benchmark (a risk metric)
❌ Directly correlated with decreased profit
❌ Standard deviation of excess returns
❌ None of the above

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13. Question 13
    Most established metric for VC/PE funds:

✔️ Internal Rate of Return (IRR)
❌ Tracking Error
❌ Quality Score
❌ Positive Cash Flow

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14. Question 14
    Why want low correlation to equity markets?

✔️ Because investors already invest heavily in equities and want highest risk-adjusted return on whole portfolio
❌ Because they invest in derivatives
❌ Because they make money when stock price falls
❌ Because they want a linear trend of log wealth

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15. Question 15
    Mutual fund managers judged on:

✔️ Excess return and tracking error
❌ Maximum drawdown and tracking error
❌ Linearity of log return and maximum drawdown
❌ All of the above

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🧾 Summary Table of All Answers

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