Question

Two investment advisers are comparing performance. One averaged a 15.8% rate of return and the other...

Two investment advisers are comparing performance. One averaged a 15.8% rate of return and the other a 19.77% rate of return. However, the β of the first investor was 1.5, whereas that of the second investor was 1. Required: Suppose that the T-bill rate was 3% and the market return during the period was 15%. Aside from the issue of general movements in the market, outline the difference between the superior and inferior portfolios. Answer % Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

Answer% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

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Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

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