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You hired an analyst to pick a portfolio stocks who achieved a return of 8.75%. The market returned 8%. The risk free rate is 2%.

You hired an analyst to pick a portfolio stocks who achieved a return of 8.75%.

The market returned 8%. The risk free rate is 2%. The beta of the analysts portfolio

is 1.2. The analyst claims that his performance is very good since he outperformed

the market. Comment on his claim.

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