QUESTION 8

Portfolio	Expected Return	Standard Deviation
X	13%	25%
Y	10%	24%
Z	11%	23%

Given the reward to risk relationship, there is one portfolio in the table that no rational investor would choose. Which one is it?

		X
		Y
		Z

QUESTION 9

Table 2
	Sharpe Ratio	Alpha
ABC	.44	1.5%
XYZ	.33	2%

Use the information in Table 2 to answer this question. You are trying to evaluate the performance of the investment professionals. If you are looking for someone who is good at outperforming the benchmark, which do you choose?

		ABC because he has the lower excess return.
		XYZ because she has the higher excess return.
		XYZ because she generates a higher return per unit of risk.
		ABC because he generates a higher return per unit of risk.