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Two investment advisors are comparing performance Advisor A averaged a 17% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the per was 13%, which advisor was the better stock picker? O Advisor 8 was better because he achieved a good return with a lower beta Advisor Awas better because he generated a larger alpha Advisor A was better because he generated a higher return Advisor B was better because he generated a larger alpha

Two investment advisors are comparing performance Advisor A averaged a 17% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the per was 13%, which advisor was the better stock picker? O Advisor 8 was better because he achieved a good return with a lower beta Advisor Awas better because he generated a larger alpha Advisor A was better because he generated a higher return Advisor B was better because he generated a larger alpha

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Two investment advisors are comparing performance Advisor A averaged a 17% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the per was 13%, which advisor was the better stock picker? Advisor B was better because he achieved a good return with a lower beta Advisor Awas netter because he generated a larger alpha Advisor A was better because he generated a higher retum Advisor B was better because he generated a larger alpha
Transcribed Image Text:Two investment advisors are comparing performance Advisor A averaged a 17% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the per was 13%, which advisor was the better stock picker? Advisor B was better because he achieved a good return with a lower beta Advisor Awas netter because he generated a larger alpha Advisor A was better because he generated a higher retum Advisor B was better because he generated a larger alpha
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