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31 October, 05:27

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 investor 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)

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  1. 31 October, 07:25
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    Cannot be determined

    Explanation:

    Data given in the question

    For one, the Rate of return = 19%

    For one, the Rate of return = 16%

    And,

    The beta of the first investor = 1.5

    The beta of the second investor = 1

    So for better selector, we need to take the market rate of return and the risk-free rate of return without these two we are unable to say which one is better selector
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