Two investment advisers are comparing performance. One averaged a 19% rate of return and the other a

Question:

Two investment advisers are comparing performance. One averaged a 19% rate of return and the other a 16% rate of return. However, the beta of the first investor was 1.5, whereas that of the second was 1.

a. Can you tell which investor was a better selector of individual stocks (aside from the issue of general movements in the market)?

b. If the T-bill rate were 6% and the market return during the period were 14%, which investor would be the superior stock selector?

c. What if the T-bill rate were 3% and the market return were 15%?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...