Suppose Two Portfolios Have the Same Average Return,the Same Standard

question 38

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 is no data on the alpha of the portfolio
• E)none of the above is true.

---

Definitions:

Subcontractingcost

The expense incurred when a business hires outside contractors to perform tasks that could be done internally or as part of a project.

Inventory Holding Cost

Inventory holding cost refers to the total cost associated with storing unsold goods or materials, including warehousing, depreciation, insurance, and obsolescence costs.

Subcontracting

The practice of assigning part of the obligations and tasks of a contract to another party, often to specialize or expedite processes.