1) Most actively managed mutual funds, when compared to a market index:

a. Beat the index return in all years.

b. Beat the index return in most years.

c. Exceed the return of the index.

d. Do not generally outperform the index.

2) The Panda Fund is a large cap equity fund. Assuming the risk-free rate of interest is 4%, the Panda Fund Sharpe ratio is closest to:

a. 47%

b. 52.1%

c. 60%

d. 106%

3) Which one of the following is accurate for a purely passive investment strategy using mutual funds?

a. It uses only index funds.

b. It allocates assets in fixed proportions that do not vary with market conditions.

c. It incorporates only funds with a beta of 2.0 or higher.

d. Both a and b.