Question: 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

measure for performance evaluation. The risk-free return during the sample period is

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. Residual Average Standard Return Deviation Beta Fund A 20% 4.00% 0.8 Fund B 21% 1.80% 1.0 Fund C 23% 1.20% 1.2 The fund with the highest information ratio measure is Multiple Choice Fund B Fund B. Fund A Funds A and C (tied for highest). Funds A and B (tied for highest). Fund C

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