Allison's Portfolio Has an Expected Return of 14% and a Beta

question 39

Multiple Choice

Allison's portfolio has an expected return of 14% and a beta of 1.37. Brianna's portfolio has an expected rate of return of 11% and a beta of 1. The risk-free rate is 3%. According to the Treynor measure,

• A) Allison has the better portfolio.
• B) Brianna has the better portfolio.
• C) The portfolio's are equally desirable.
• D) The answer depends on Allison and Brianna's risk tolerance.

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Definitions:

Sale Prices

The actual prices at which goods or services are sold to customers, often after discounts are applied.

Prestige Pricing

A pricing strategy where prices are set higher than average to present a perception of exclusivity and high quality.

Impeccable Service

Exceptional and flawless service delivery that exceeds customer expectations and ensures total satisfaction.

Push Strategy

A marketing approach that involves taking the product directly to the customer via whatever means to ensure the customer is aware of your brand at the point of purchase.