Suppose Two Portfolios Have the Same Average Return and the Same

question 14

Multiple Choice

Suppose two portfolios have the same average return and the same standard deviation of returns, but Buckeye Fund has a higher beta than Wild Cat Fund. According to the Treynor 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.
• E) None of the options are correct.

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Definitions:

Independent

Free from outside control; not depending on another's authority or on specific factors.

Maslow's Hierarchy

A theory in psychology that categorizes human needs into a five-tier model, from basic (such as food and shelter) to complex (such as self-fulfillment).

Mental Illness

Refers to a wide range of mental health conditions that affect mood, thinking, and behavior.

Internalized

Refers to the absorption and incorporation of ideas, attitudes, or values into one's own belief system or psychological makeup.