You are comparing two different mutual funds and you have performance data from the past several years that allows you to assess the Sharpe ratios. Based on current risk free rates and the return on the market, you are also able to generate a Modigliani Measure score for each fund. Fund A: M2 = -24 Fund B: M2 = .78 Based on this M2 figures, which fund should you choose if you are seeking the fund with superior performance based on total risk?

You are comparing two different mutual funds and you have performance data from the past. several years that allows you to assess the Sharpe ratios. Based on current risk free rates and the return on the market, you are also able to generate a Modigliani Measure score for each fund. Fund A:M2=.24 Fund B:M2=.78 Based on this M2 figures, which fund should you choose if you are seeking the fund with superior performance based on total risk