Two investment advisors are comparing performance. Advisor A averaged a 20% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the period was 13%, which advisor was the better stock picker?

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

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

C. Advisor B was better because he generated a larger alpha

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

You are creating an investment portfolio made of T-bills and Market Index Fund. If you want to achieve a Beta of 1.3 for your portfolio, would it be possible with these 2 types of securities? Assume that you cannot borrow.

A. Yes

B. No

C. Cannot tell based on information provided

D. Depends on the risk-free rate