QUESTION 25

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 S&P 500 index is the average returns on the market portfolio. The average returns, residual standard deviations, and betas for the three funds are given below.

Average Return(%):

Fund A - 24

Fund B - 12

Fund C - 22

S&P 500 - 18

Standard Deviation(%):

Fund A - 30

Fund B - 10

Fund C - 20

S&P 500 - 16

Beta:

Fund A - 1.5

Fund B - 0.5

Fund C - 1

S&P 500 - 1

Which fund is the best performer based on the information ratio?

put all working out and dont use execl