Suppose That Over the Same Time Period Two Portfolios Have

question 22

Multiple Choice

Suppose that over the same time period two portfolios have the same average return and the same standard deviation of return,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 since there is no data on the alpha of the portfolio

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Definitions:

Anti-Employment Discrimination Legislation

Laws designed to prevent unfair treatment of workers based on personal characteristics, such as the Civil Rights Act in the United States.

Female/Male Earnings Ratio

A metric comparing the average earnings of women to that of men, often used to explore gender wage disparities.

Female to Male Earnings Ratio

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Long-Run Adjustment

Changes in production or operations that a firm can undertake over time to adapt to new conditions, typically involving capital investment.