Question 1 Performance Evaluation (20 Marks) You are a financial advisor at a local investment company in Johannesburg. A client has come to you for professional advice. Based on the clients investment objectives and constraints, you have identified two possible funds: Fund A and Fund B. You have gathered the following information to assist you with advising your client: Fund A Fund B JSE All Share Index (market portfolio) Treasury Bills Average return 16% 12% 8% 5% Standard deviation 9% 8% 5% 0% Beta 1.21 1.05 1.00 0 Residual standard deviation 8% 6% 0 0 Required: 1.1. Advise your client on which fund should be selected based on the Sharpe ratio and the M2 measure. (9 marks) 1.2. Advise your client on which fund should be selected based on the Treynor ratio and the T2 measure. (9 marks) 1.3. Advise your client of your final recommendation if the selected fund is going to be a stand-alone fund that will not be combined with other securities