Draw a diagram showing characteristic lines in risk premium form for two portfolios, A and B. A's

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Draw a diagram showing characteristic lines in risk premium form for two portfolios, A and B. A's line is steeper than B's, with a lower intercept. Both alphas are significant.

a. Label each axis.

b. Which fund has the larger beta?

c. Based on a visual inspection, which fund has the larger alpha?

d. Which fund outperformed the market?

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Investments Analysis and Management

ISBN: 978-1118363294

12th edition

Authors: Charles P. Jones

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Question Posted: Dec 15, 2015 06:33 AM

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Draw a diagram showing characteristic lines in risk premium form for two portfolios, A and B. A's

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a The vertical axis is ERp RF The horizontal axis ...View the full answer

Investments Analysis and Management

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