Question 13 Two investment advisers specilize helping investors beat the market. Investors are...
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Question 13
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Two investment advisers specilize helping investors beat the market. Investors are comparing their performance to decide which adviosrs to choose. Adviser A averaged a 15% return with a portfolio beta of 1.5, and adviser 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 adviser was the better stock picker?
Advisor A was better because he generated a larger alpha.
Advisor B was better because she generated a larger alpha.
Advisor A was better because he generated a higher return.
Advisor A and B are the same because their returns are the same.
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