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

question 60

Multiple Choice

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

• A)is better than the performance of Raider Fund.
• B)is the same as the performance of Raider Fund.
• C)is poorer than the performance of Raider Fund.
• D)cannot be measured as there is no data on the alpha of the portfolio.
• E)none of the above is true.

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Definitions:

Substitution Effect

The economic principle referring to the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute more expensive items with cheaper alternatives.

Product Rises

This term seems unclear or incomplete. If referring to a situation where the price or demand for a product increases, there is no single term that universally describes this scenario as "Product Rises." NO.

Income Effect

The change in consumption resulting from a change in real income, which can itself result from changes in wages or prices.

Money Income

The total amount of monetary earnings or receipts a person or household receives from various sources including wages, dividends, and benefits.