You want to evaluate three mutual funds using the Sharpe measure for performance evaluation. The risk-free return during the sample period is 4%. The average returns, standard deviations, and betas for the three funds are given below, as are the data for the S&P 500 Index.
The fund with the highest Sharpe measure is
Definitions:
Exchange Rate
The worth of a currency when exchanged for a different one.
Risk-Free Rate
The theoretical rate of return on an investment with no risk of financial loss, often represented by the yield on government securities.
Future Exchange Rate
Future Exchange Rate is the anticipated value of one currency in terms of another currency at a specified date in the future, often determined through futures contracts.
British Securities
Stocks, bonds, or other financial instruments issued by companies or the government in the United Kingdom.
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