Suppose Two Portfolios Have the Same Average Return, the Same

question 26

Multiple Choice

Suppose two portfolios have the same average return, the same standard deviation of returns, but portfolio A has a higher beta than portfolio B.According to the Sharpe 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

---

Definitions:

Appellate Court

A court that reviews and potentially revises the decisions made by lower courts, focusing on the application and interpretation of law rather than fact-finding.

Nonverbal Behavior

Communication expressed through actions or physical cues rather than words, such as body language, facial expressions, and gestures.

Trial Court's Findings

The decisions, facts, and legal conclusions reached by a trial court following a judicial proceeding.

United States Supreme Court

The highest court in the United States, established pursuant to Article III of the U.S. Constitution, with ultimate appellate jurisdiction over all federal and state court cases involving issues of federal law.