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

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