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3) Two investment advisors are comparing performance. Advisor A averaged a 17% rate of return with a portfolio beta of 1.5. Advisor B averaged a
3) Two investment advisors are comparing performance. Advisor A averaged a 17% rate of return with a portfolio beta of 1.5. Advisor B averaged a 14% rate of return with a portfolio beta of 1. Risk-free rate was 4% and market return was 12% during the period. Can you tell which advisor was the superior stock selector? (Hint: Check which advisor generated higher alpha)
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