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The Average Returns, Standard Deviations and Betas for Three Funds

question 8

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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%. 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 Jensen measure for performance evaluation.The fund with the highest Jensen measure of performance is __________. A)  Fund A B)  Fund B C)  Fund C D)  S&P500
-You wish to evaluate the three mutual funds using the Jensen measure for performance evaluation.The fund with the highest Jensen measure of performance is __________.


Definitions:

Marginal Product

The additional output that results from using one more unit of a variable input, holding all other inputs constant.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot increase proportionally.

Total Product Curve

A graphical representation showing how the total quantity of output changes with variation in the quantity of a single input, holding other inputs constant.

Marginal Returns

The additional output gained by adding one more unit of input, holding all other inputs constant.

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