Answer Happy

Two investment advisers are comparing performance. One averaged
a 19% return and the other a 16% return. However, the beta of the
first adviser was 1.5, while that of the second was 1.
Required:
a. Can you tell which adviser was a better
selector of individual stocks (aside from the issue of general
movements in the market)?
multiple choice 2
First investment advisor
Second investment advisor
Cannot be determined
b. If the T-bill rate were 6% and the market
return during the period were 14%, which adviser would appear
to be the superior stock selector?
multiple choice 4
First investment advisor
Second investment advisor
Cannot be determined
c. What if the T-bill rate were 3% and the
market return 15%?
multiple choice 6
First investment advisor
Second investment advisor
Cannot be determined