Suppose Two Portfolios Have the Same Average Return, the Same

question 37

Multiple Choice

Suppose two portfolios have the same average return, 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

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Definitions:

Social Constructionism

The theory that much of what we understand and know about the world is constructed through social processes and interactions.

Consensual Validation

The process by which people seek affirmation of their own beliefs, attitudes, and values from others who are similar.

Symbolic Interactionism

A sociological perspective that emphasizes the role of symbols and language in the creation of social realities and individual identities.

Bidirectional Causal Relationship

A relationship where two variables influence each other, with each variable being both a cause and an effect in the relationship.