You Want to Evaluate Three Mutual Funds Using the Jensen

question 21

Multiple Choice

You want to evaluate three mutual funds using the Jensen measure for performance evaluation.The risk-free return during the sample period is 6%, and the average return on the market portfolio is 18%.The average returns, standard deviations, and betas for the three funds are given below. The fund with the highest Jensen 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).

Understand and apply the correct journal entries for notes payable and receivable transactions.

Identify and record employer and employee responsibilities regarding FICA and unemployment taxes.

Understand sales tax collection and remittance requirements.

Grasp warranty liabilities estimation and recording procedures.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from the central bank's discount window.

High-risk Projects

High-risk projects are those that come with a greater uncertainty regarding outcomes, potentially offering higher returns alongside increased potential for loss.

Low-risk Proposals

Refers to proposals or projects with a minimal chance of failure or loss, often associated with stable returns.

Forecasting Techniques

Methods or processes used in attempting to predict future events or trends, based on historical data and analysis.