Suppose Two Portfolios Have the Same Average Return and the Same

question 28

Multiple Choice

Suppose two portfolios have the same average return and the same standard deviation of returns, but Aggie Fund has a higher 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 are no data on the alpha of the portfolio.

---

Definitions:

High-tech Industry

A sector of the economy focused on the development, production, and sale of advanced technological products and services, including electronics, software, and biotechnology.

Social Stratification

A system by which a society ranks categories of people in a hierarchy based on factors like wealth, income, race, education, and power, leading to unequal access to resources and opportunities.

Downward Mobility

A decline in social, economic, or professional status, often contrasted with upward mobility, which is a rise in social, economic, or professional status.

Achievement-based

Achievement-based refers to systems or values where progress and status are earned based on individual accomplishments and merits rather than inherited or ascribed statuses.