Two investment advisers are comparing performance. Adviser A averaged a 20% return with a portfolio beta of 1.5, and adviser 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 period was 13%, which adviser was the better stock picker?

A. Advisor A was better because he generated a larger alpha.
B. Advisor B was better because she generated a larger alpha.
C. Advisor A was better because he generated a higher return.
D. Advisor B was better because she achieved a good return with a lower beta.


A. Advisor A was better because he generated a larger alpha.

Business

You might also like to view...

My company states integrity as a core commitment on its website. I see fraud occurring often in my division of the company. Which archetype describes this company?

A. gap between espoused values and behaviors B. competing commitments C. work avoidance D. speaking the unspeakable

Business

For Revenues, the category of account and its normal balance is ________

A) equity and a credit balance B) assets and a debit balance C) assets and a credit balance D) equity and a debit balance

Business

In the minimal-spanning tree technique, if there is a tie for the nearest node, that suggests that there may be more than one optimal solution

Indicate whether the statement is true or false

Business

A person who buys a copyrighted work cannot sell it to someone else

Indicate whether the statement is true or false

Business