USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 12

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The last year's performance for four mutual funds is presented below. The market return was 10.70 percent, the standard deviation was 13.1 percent last year, and the risk-free rate of return was 5%.

-Refer to Exhibit 18.7. Based on the Sharpe Measure, which portfolio preformed best?

• A) A
• B) B
• C) C
• D) D
• E) market

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of the product, like alcohol, tobacco, and gasoline.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium outcome is not achievable due to market failure or interventions.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to changes in price, income, or other factors.