You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The risk-free return during the sample period is 6%, and the average return on the market portfolio is 19%. The average returns, residual standard deviations, and betas for the three funds are given below. Average Return Residual Standard Deviation 20% 4.00% 21% 1.25% 23% 1.20% Fund A Fund B Fund C The fund with the highest information ratio measure is A. Fund A B. Fund B C. Fund C D. Funds A and B are tied for highest E. Funds A and C are tied for highest Beta 0.8 1.0 1.2 You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The risk-free return during the sample period is 6%, and the average return on the market portfolio is 19%. The average returns, residual standard deviations, and betas for the three funds are given below. Average Return Residual Standard Deviation 20% 4.00% 21% 1.25% 23% 1.20% Fund A Fund B Fund C The fund with the highest information ratio measure is A. Fund A B. Fund B C. Fund C D. Funds A and B are tied for highest E. Funds A and C are tied for highest Beta 0.8 1.0 1.2
Expert Answer:
Answer rating: 100% (QA)
To determine the fund with the highest information ratio we need to calculate the in... View the full answer
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date:
Students also viewed these finance questions
-
You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The average risk-free return during the sample period is 3% p.a., and the average return on the...
-
Clark was driving his four-wheeler 15 meters per second on a dirt road. It had just rained and there were massive mud puddles on the road. He hits on and it slows him to a speed of 3.7 meters per...
-
Given the definition of the radian angle: S l Where [s] = m, [4] = m What are the dimensions of angles? A. No way to know B. meters, m C. 1 (or no units/dimensions) D. seconds, S E. kilograms, kg
-
From the following, calculate total manufacturing costs: Direct labor ................................$ 82,000 Raw materials inventory, May 31......... 9,600 Raw materials purchases...
-
A firm manufactures three products, P1, P2 and P3, which it sells to two customers, C1 and C2. The number of items of each product that are sold to these customers is given by The firm charges both...
-
Find the natural frequencies of the beam shown in Fig. 12.33, using three finite elements of length \(l\) each. p. A, I, E + FIGURE 12.33 Fixed-fixed beam with intermediate supports.
-
Job-costing spoilage and scrap. MetalWorks, Inc., manufactures various metal parts in batches as ordered by customers, and accounts for them using job costing. Job 2346-8, a large job for customer X,...
-
Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income Product White 48% Fragrant 20% Loonzain 32% $331,200 100% $ 138,000 99,360 30% 110,400 100%...
-
Ann Riat - Salary Comparison The director of the company has asked you to confirm with Ann if she prefers to keep her annual salary of $64,000 and agrees to receive no commission on future...
-
Write this report properly by hand written. Name of the Experiment Estimation of copper in the supplied solution using standardized sodium thiosulphate solution. Theory When KI is added to a solution...
-
What are the effects of urbanization on Latin America, Africa, and the Caribbean?
-
Explain what is meant by risk-neutral pricing. What is the reason for pricing options using a risk-neutral pricing approach?
-
How have family and gender patterns in Latin America, Africa, and the Caribbean been influenced by globalization?
-
How did religion change as a result of colonialism and Western influence in the Middle East and Asia?
-
Describe the specific changes that characterized the evolution of technology from the Lower Paleolithic (Oldowan, Acheulian) through the Middle Paleolithic (Mousterian), and Upper Paleolithic periods.
-
2D arrays then solve the Write the following Java methods and test it in the main() method. 1- Write a method printArray() to display the elements of a two-dimensional array of integers. The array is...
-
Write the expression in radical notation. Then evaluate the expression when the result is an integer. 23 -1/2
-
Use the BlackScholes model for pricing a call, putcall parity, and the previous question to show that the BlackScholes model for directly pricing a put can be written as follows: P = E e Rt N(d 2 )...
-
Explain why a swap is effectively a series of forward contracts. Suppose a firm enters a swap agreement with a swap dealer. Describe the nature of the default risk faced by both parties.
-
The following table presents the long-term liabilities and stockholders equity of Information Control Corp. one year ago: Long-term debt ............................... $ 65,000,000 Preferred stock...
-
Develop the following systems using the fairness pattern: 1. Tax fairness: A tax platform based on an ideal that aims to create a system of taxation that is fair, clear, and equivalent for all...
-
BOs make this pattern stable and extendible. Do you agree?
-
Write down some common case studies to highlight the importance of stable analysis patterns.
Study smarter with the SolutionInn App