A$.$ Advisor A was better because he generated a larger alpha.

B$.$ Advisor B was better because she generated a larger alpha.

C$.$ Advisor A was better because he generated a higher return.

D$.$ Advisor B was better because she achieved a good return with a lower beta.

$4.$ In order for you to be indifferent between the after$-$tax returns on a corporate bond paying

$9\%$ and a tax$-$exempt municipal bond paying $7\%,$ what would your tax bracket need to be$?$

A$.17\mathrm{.}6\%$

B$.27\%$

C$.22\mathrm{.}2\%$

D$.19\mathrm{.}8\%$

E$.$ None of the above

$5.$ Consider two stocks, A and B$.$ Stock A has an expected return of $10\%$ and a beta of $1\mathrm{.}2.$

Stock B has an expected return of $14\%$ and a beta of $1\mathrm{.}8.$ The expected market rate of

return is $9\%$ and the risk$-$free rate is $5\%.$ Security $\_\_\_\_\_\_\_\_$ would be considered the

better buy because $\_\_\_\_\_\_\_\_.$

A$.$ A; it offers an expected excess return of $\mathrm{.}2\%$

B$.$ A; it offers an expected excess return of $2\mathrm{.}2\%$

C$.$ B; it offers an expected excess return of $1\mathrm{.}8\%$

D$.$ B; it offers an expected return of $2\mathrm{.}4\%$

E$.$ none of the above

$6.$ A portfolio is composed of two stocks, A and B$.$ Stock A has a standard deviation of return

of $28\%,$ while stock B has a standard deviation of return of $22\%.$ Stock A comprises $60\%$ of

the portfolio, while stock B comprises $40\%$ of the portfolio. If the variance of return on the

portfolio is $\mathrm{.}050,$ the correlation coefficient between the returns on A and B is $\_\_\_\_\_\_\_\_\_.$