Question

Two investment advisers are comparing performance. One averaged a 15.16% rate of return and the other...

Two investment advisers are comparing performance. One averaged a 15.16% rate of return and the other a 20.74% 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.

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Answer #1

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

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