Suppose Two Portfolios Have the Same Average Return and the Same

question 24

Multiple Choice

Suppose two portfolios have the same average return and the same standard deviation of returns, but Buckeye Fund has a lower beta than Wild Cat Fund. According to the Sharpe measure, the performance of Buckeye Fund

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

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Definitions:

Representative Sample

A part of a population that accurately represents the entire group's composition.

Observer Effect

The phenomenon where the act of observation alters the behavior of the observed subject or the outcome of an experiment.

Naturalistic Observation

A research method where subjects are observed in their natural environment without any manipulation by the researcher.

Ethical Research

The practice of conducting studies and experiments in accordance with established ethical principles to ensure fairness, integrity, and respect for all participants.