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Two investment advisors are comparing performance. One averaged 19% rate of return and the other 16% rate of return. The beta of the first manager
Two investment advisors are comparing performance. One averaged 19% rate of return and the other 16% rate of return. The beta of the first manager was 1.5 and the beta for the second was 1.0. Can you tell which manager was a better stock picker? Suppose the risk free return was 3% and the market return was 15%.
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