40.If a portfolio manager can consistently produce a positive alpha,then her performance is considered to be (a)superior (b)average (c)below average (d)indeterminate Answer:(a) 41.Consider the following information:the risk-free rate is 5%and the expected rate of return on the market portfolio is 12%.If you have a stock with a beta of 1.50 and you expect it to offer a rate of return of 13%,then you (a)consider it fairly priced (b)sell short the stock because it is overpriced (c)sell the stock because it is fairly priced (d)buy the stock because it is underpriced Answer:(b) Questions 42 and 43 refer to the following information: Consider a portfolio exhibiting an expected return of 21%in an economy in which the riskless interest rate is 8%,the expected return to the market portfolio is 14%,and the standard deviation of the return to the market is 0.30.Assuming this portfolio is efficient,complete the following problems: 42.Determine the beta. (a0.46 (b)0.93 (c)2.17 (d3.50 Answer:(c) 43.Determine the standard deviation of its return. (a0.13 (b)0.65 (c)0.70 (d1.39 Answer:(b) 13-1213-12 40. If a portfolio manager can consistently produce a positive alpha, then her performance is considered to be ________. (a) superior (b) average (c) below average (d) indeterminate Answer: (a) 41. Consider the following information: the risk-free rate is 5% and the expected rate of return on the market portfolio is 12%. If you have a stock with a beta of 1.50 and you expect it to offer a rate of return of 13%, then you (a) consider it fairly priced (b) sell short the stock because it is overpriced (c) sell the stock because it is fairly priced (d) buy the stock because it is underpriced Answer: (b) Questions 42 and 43 refer to the following information: Consider a portfolio exhibiting an expected return of 21% in an economy in which the riskless interest rate is 8%, the expected return to the market portfolio is 14%, and the standard deviation of the return to the market is 0.30. Assuming this portfolio is efficient, complete the following problems: 42. Determine the beta. (a) 0.46 (b) 0.93 (c) 2.17 (d) 3.50 Answer: (c) 43. Determine the standard deviation of its return. (a) 0.13 (b) 0.65 (c) 0.70 (d) 1.39 Answer: (b)