Suppose Two Portfolios Have the Same Average Return and the Same

question 68

Multiple Choice

Suppose two portfolios have the same average return and the same standard deviation of returns, but portfolio A has a lower beta than portfolio B. According to the Treynor measure, the performance of portfolio A

• A) is better than the performance of portfolio B.
• B) is the same as the performance of portfolio B.
• C) is poorer than the performance of portfolio B.
• D) cannot be measured as there are no data on the alpha of the portfolio.
• E) None of the options are correct.

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Definitions:

Organizational Behaviour

Organizational behaviour is the study of how people interact within groups and organizations, and how this behavior affects the performance, structure, and culture of the organization.

Human Resources Management

The strategic approach to the effective management of people in an organization to help the business gain a competitive advantage.

Evidence-Based Management

An approach to managerial decision making and organizational practices that is informed by the best available evidence.

Evidence-Based Management

The practice of making managerial decisions based on the best available scientific evidence to enhance outcomes.