The Following Table Summarizes Selected Statistics for Two Portfolios for a 10-Year

question 56

Multiple Choice

The following table summarizes selected statistics for two portfolios for a 10-year period ending in 2006.Assume that the risk-free rate is 4% over this period. As measured by the Sharpe ratio,the fund with the superior risk-adjusted performance during this period is _________________________________________________________.

• A) Fund A because it has a lower positive Sharpe ratio than Fund B
• B) Fund B because it has a lower positive Sharpe ratio than Fund A
• C) Fund A because it has a higher positive Sharpe ratio than Fund B
• D) Fund B because it has a higher positive Sharpe ratio than Fund A

---

Definitions:

K

The symbol for potassium, a chemical element with atomic number 19, essential for plant growth and functioning of the nervous system in animals.

pH

A measurement system that determines whether an aqueous solution is acidic or basic, scaling from 0 (highly acidic) to 14 (highly basic).

K

Potassium, a chemical element with symbol K, essential for living organisms and used in numerous industrial processes.

[HCO3-]

The chemical notation for bicarbonate, an anion that acts as a buffer in maintaining acid-base balance in biological systems.