Question: One investment adviser averaged 20% return while another one 15% return. The beta of the first adviser was 1.6, while that of the second was

One investment adviser averaged 20% return while another one 15% return. The beta of the first adviser was 1.6, while that of the second was 1.2.

  1. Which adviser was a better selector of individual stocks (ignoring general movements in the market)?

  1. If the T-bill rate was 5% and the market return during the period was 13%, which adviser would be the superior stock selector?

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