Suppose the Expected Return for the Market Portfolio and Risk-Free

question 23

Multiple Choice

Suppose the expected return for the market portfolio and risk-free rate are 13% and 3% respectively.Stocks A,B,and C have Treynor measures of 0.24,0.16,and 0.11,respectively.Based on this information an investor should

• A) Buy stocks A, B, and C
• B) Buy stocks A and B and sell stock C
• C) Buy stock A and sell stocks B and C
• D) Sell stocks A, B, and C
• E) Hold stocks A, B, and C

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