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SeaBass2013 SeaBass2013
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Allison's portfolio has a beta of 1.37 and earns a return of 14%.  Brianna's portfolio has a beta of 0.8 and earns a return of 11%.  The risk-free rate is 3% and the expected rate of return on the market is 12%. According to the Jensen's measure,

▸ Allison has the better portfolio.

▸ Brianna has the better portfolio.

▸ the portfolios are equally desirable.

▸ the answer depends on Allison and Brianna's risk tolerance.
Textbook 
Fundamentals of Investing

Fundamentals of Investing


Edition: 14th
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SaharakSaharak
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