Portfolio A has a higher total risk but lower total return than the market portfolio. which...

Portfolio A has a higher total risk but lower total return than the market portfolio. which of the following is least likely?

	A.	Portfolio has a beta that is lower than 1.
	B.	Portfolio A has a relatively high unsystematic risk.
	C.	Portfolio A cannot possibly lie on the SML (security market line).

Martha Stevens, CFA, is an investment manager who uses her friend, Robert James, exclusively for her clients' brokerage transactions. James provides better services than other brokers in return for a slightly higher price, which Stevens believes is justified. Which of the following statements is most accurate?

	A.	Stevens is in violation of Standard III (A): Loyalty, Prudence, and Care.
	B.	Stevens is in violation of Standard III (B): Fair Dealing.
	C.	Steven has not violated any standard.

Solutions

Expert Solution

Ans:

Option A

Reason : When portfolio A has higher total risk then it is not possible to have beta less than 1. It should be greater than 1.

Option C

Reason : as per standard III(A) and III(B) Steven not violating any rule as he is giving quality service over just service. So it is fair to charge more for quality from customers.

jeff jeffy answered 1 year ago

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