Suppose Two Portfolios Have the Same Average Return and the Same

question 28

Multiple Choice

Suppose two portfolios have the same average return and the same standard deviation of returns, but Aggie Fund has a higher beta than Raider Fund. According to the Treynor measure, the performance of Aggie Fund

• A) is better than the performance of Raider Fund.
• B) is the same as the performance of Raider Fund.
• C) is poorer than the performance of Raider Fund.
• D) cannot be measured as there are no data on the alpha of the portfolio.

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Definitions:

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Thin tools, often made of wood, used in medical examinations to depress the tongue and inspect the mouth and throat.

Scalpel

A small and extremely sharp bladed instrument used for surgery, anatomical dissection, and various arts and crafts.

Gauze Squares

Medical supplies made from woven or non-woven materials used for wound dressing, absorption, and protection.

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Made free from all living microorganisms, often through the use of heat, chemicals, or radiation, to prevent infection or contamination.