survivorship bias, ambiguous, no specified in advance. it actually violates everything except measurable according to the book.
i had survivorship and not investable. can’t remember third. crappy question
was this in am session? can’t rember that I had this question… hopefully I didn’t left out this question, i was in a hurry in AM 
kwokchun30 Wrote: ------------------------------------------------------- > 3 reasons have to list out…My answer is 1) bias > 2) not investible 3) not specify in advance Agree
- SAMURAI 2) Rely on Compilers representations 3) Survivorship Bias
I believe for hedge fund benchmarks, following three biases have been most prominently mentioned in the text. 1. Survivorship Bias 2. Stale Price Bias 3. Backfill Bias So, I straight away mentioned these three. Didn’t had much time to think. I stressed on the word “three” and recollected these exact three things.
how about popularity bias?? why no one is mentioning?
The question was not about Hedge Fund Benchmark…It asked why not Median Manager as Hedge Fund Benchmark…isnt it?
I said: -Not specified in advance -Not investable -Not appropriate because not same investment strategy
Do you guys remember how much this was worth – I accidently Left it blank. Really rookie move on my part – Was thinking SAMARUI and told myself to do everything else and think it over – then totally forgot about it.
cdogstu77 Wrote: ------------------------------------------------------- > Hmm…i put not investable, not specificied and > ambiguous since they referred to “Manager > Universe”. This is what I put.
yeah i think they were referring to Manager Universe and not whats wrong with a hedge fund benchmark In which case, a manager universe is only measurable, every other SAMURAI could be correct in the question
I put 1. Not specified in advance 2. Survivorship Bias 3. Voluntary reporting results in an upward bias
Do you also have to put in info on WHY you selected those?
By putting Median, they wanted you to talk about benchmarking. therefore Samurai. I remember this exact sentence from schweser videos " Median managers, although most widely used actually have only 1 of 7 valid benchmark properties, which is measurable" Therefore any other 6 would have scored you the points, I put not investable, not specified ion advance, and not reflective of current investment opinion. All those that put survivorship bias, etc…thats all wrong because that has to do with PERFORMANCE biases of hedge funds and how they are biased. By CFAI specifically using Median Universes, they were talking specifically about the properties of benchmakrs
I also did same !! This is in the text book, biases are sub headers below these rationale Re: Hedgefund Benchmarking new Posted by: Bacaladitos (IP Logged) [hide posts from this user] Date: June 8, 2009 04:15AM I said: -Not specified in advance -Not investable -Not appropriate because not same investment strategy
^^IH8FSA, that certainly makes sense. However: LOS 37.s. Critique the conventions and special issues involved in hedge fund performance evaluation, including the use of hedge fund indices and the Sharpe ratio. Simply by including the word median in a request does not automatically imply benchmarking. or Samurai. If someone asks you to evaluate the performance of Hedge fund X using the median of all Hedge Funds the issue is not that it is not investable, or specified in advance, …but that evaluating performance using the median fund results in biased comparisons such as: -Survivorship - biases the median up -Risk - differing levels of risk make comparisons using the median problematic -other things that I do not remember. -so maybe ambiguous? (I hope.)
Mann, I did not use the SAMURAI at all. I answered it like a regular question. -Difficult to find and guage how close it is to the real strategy for the benchmark as it is very difficult to determine the real risk exposure and long/short position of the benchmarks. -Too many outliers and therefore not a real measure of comparison. -Something about absolute return and risk vs risk adjusted return. (can’t remember exactly which way I positioned it)
i put not specified in advance - dont know who the media is until after not investable - outlined in the readings that another manager’s fund isnt considered investable not unambiguous - unclear as to what a “similar” hedge fund strategy really means
I also wasn’t sure what to use. I know all the SAMURAI, but I used not investable, survivorship bias and backfill bias to hedge my bet. Irritating question.