The Average Returns, Standard Deviations and Betas for Three Funds

question 42

Multiple Choice

The average returns, standard deviations and betas for three funds are given below along with data for the S&P 500 index. The risk-free return during the sample period is 6%. You wish to evaluate the three mutual funds using the Sharpe measure for performance evaluation. The fund with the highest Sharpe measure of performance is ________.

• A)Fund A
• B)Fund B
• C)Fund C
• D)indeterminable

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Definitions:

Certified Check

Any check that is accepted by the bank from which the funds are drawn.

Teller's Check

A check drawn by a bank on its own funds and signed by a teller, often used in situations requiring guaranteed funds.

Depository Bank

A financial institution that holds and manages securities and assets on behalf of investors, such as stocks and bonds.

Payor Bank

A bank that is responsible for paying a check or draft presented for payment.