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.

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Definitions:

Sandstone

a sedimentary rock consisting primarily of sand-sized minerals or rock grains, most commonly quartz.

Limestone

A type of sedimentary rock, primarily composed of calcium carbonate, often formed from the remains of marine organisms.

Shale

A fine-grained sedimentary rock formed from clay and silt-sized particles, often easily split into thin, parallel layers.

Impermeable Layers

Geological strata that do not allow the passage of water or fluids due to their tightly packed nature.