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

question 8

Multiple Choice

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

Money

Money is a medium of exchange that nations have adopted to facilitate the sale, purchase, or trade of goods, services, and other transactions.

Future

A contract to buy or sell a specified asset at a predetermined price at a specified time in the future, used for hedging or speculation.

Equal Amounts

This term typically refers to financial transactions or mathematical problems where a series of payments or values are the same in each period.

Annuity Due

An annuity due is a type of annuity payment where payments are made at the beginning of each period, rather than at the end, as in an ordinary annuity.