Suppose Two Portfolios Have the Same Average Return and the Same

question 12

Multiple Choice

Suppose two portfolios have the same average return and the same standard deviation of returns, but portfolio A has a higher 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 are no data on the alpha of the portfolio.
• E) None of the options are correct.

---

Definitions:

Withdrawal

The physical and psychological symptoms that occur after reducing or ceasing intake of a substance to which one has become dependent.

Tolerance

The capacity to endure continued exposure to a substance without adverse reactions, or a willingness to accept feelings, habits, or beliefs that are different from one's own.

Intoxication

Intoxication is a physiological condition that results from the ingestion of substances such as alcohol or drugs, leading to impaired cognitive and physical abilities.

Tolerance

The process of becoming less responsive to a substance (such as drugs) or a stimulus after repeated exposure.