Suppose Two Portfolios Have the Same Average Return, the Same

question 17

Multiple Choice

Suppose two portfolios have the same average return, the same standard deviation of returns, but Buckeye Fund has a higher beta than Gator Fund.According to the Treynor measure, the performance of Buckeye Fund

• A)is better than the performance of Gator Fund.
• B)is the same as the performance of Gator Fund.
• C)is poorer than the performance of Gator Fund.
• 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:

Roth IRA

is an individual retirement account allowing withdrawals on a tax-free basis, provided certain conditions are met, financed by after-tax dollars.

Coverdell Education Savings Account

A tax-advantaged savings account designed to pay for education expenses at both secondary and post-secondary levels.

Traditional IRA

An individual retirement account that offers tax deferral on contributions and investment gains, with taxes paid on money withdrawn during retirement.

Coverdell Education Savings Account

An investment account in the U.S. with tax benefits, intended to promote savings for future educational costs.