Question: Please help and Explain! 6- Two investment advisers are comparing performance. One averaged a 19% rate of return and the other a 16% rate of
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 1.5 , 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 .6
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