$6-$ 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 $1\mathrm{.}5,$ 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?

$7-$ Suppose that borrowing is restricted so that the zero$-$beta version of the CAPM holds. The

expected return on the market portfolio is $17\%,$ and on the zero$-$beta portfolio it is $8\%.$

What is the expected return on a portfolio with a beta of $\mathrm{.}6?$