USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 55

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
An analyst is considering investing in funds A, B, C, and D. The market portfolio, M, is expected to be 11 percent next period, and the risk-free rate of return is 3 percent. The market portfolio had a standard deviation over the past ten years of 0.20. The analyst gathered the following information on the four funds.

-Refer to Exhibit 18.8. Compute the Jensen Measure for the C fund.

• A) 0.16 percent
• B) 1.80 percent
• C) 7.20 percent
• D) 9.00 percent
• E) 9.13 percent

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Definitions:

Circle

A simple closed shape consisting of all points in a plane that are a given distance from a given point, the centre.

Cartel

An association of independent firms or countries that agree to coordinate their production and pricing to monopolize a market or to influence market conditions.