Two investment advisers are comparing performance. Adviser A averaged a 20% return with a portfolio bela of 1.5, and adviser B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market retum during the period was 13%, which adviser was the better stock picker? OA Advisor B was better because he generated a larger alpha. OB Advisor A was better because he generated a higher return. OC Advisor A was better because he generated a larger alpha. OD. Advisor 8 was better because he achieved a good return with a lower beta

Two investment advisers are comparing performance. Adviser A averaged a 20% return with a portfolio bela of 1.5, and adviser B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market retum during the period was 13%, which adviser was the better stock picker? OA Advisor B was better because he generated a larger alpha. OB Advisor A was better because he generated a higher return. OC Advisor A was better because he generated a larger alpha. OD. Advisor 8 was better because he achieved a good return with a lower beta

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 3Q: Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation...

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