Question
In: Finance
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.
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