You Want to Evaluate Three Mutual Funds Using the Sharpe

question 50

Multiple Choice

You want to evaluate three mutual funds using the Sharpe measure for performance evaluation. The risk-free return during the sample period is 4%. The average returns, standard deviations, and betas for the three funds are given below, as are the data for the S&P 500 Index. $\begin{array}{cc} &\text {Average ReturnResidual } &\text { Standard Deviation }&\text { Beta }\\ \text { Fund A } &18\%&38\%&1.6\\ \text {Fund B } &15\%&27\%&1.3\\ \text { Fund C} &11\%&24\%&1.0\\\text {S\&P 500}&10\%&22\%&1.0\end{array}$


The fund with the highest Sharpe measure is

• A) Fund A.
• B) Fund B.
• C) Fund C.
• D) Funds A and B (tied for highest).
• E) Funds A and C (tied for highest).

Grasp the concept of reliability in psychological testing and how it is measured.

Distinguish between reliability and validity in the context of psychological assessments.

Recognize the importance of standardization in test administration and its role in ensuring test accuracy.

Understand the concept of content validity and its importance in test construction.

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