Question: You want to evaluate three mutual funds using the Treynor ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average

You want to evaluate three mutual funds using the Treynor ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average returns, standard deviations, and betas for the three funds are given below, as are the data for the S&P 500 Index.

Average Return

Standard Deviation

Beta

Fund A

24

%

30

%

1.5

Fund B

12

%

10

%

0.5

Fund C

22

%

20

%

1.0

S&P 500

18

%

16

%

1.0

The fund with the highest Treynor ratio is __________.

A) Fund A.

B) Fund B.

C) Fund C.

D) Funds A and B (tied for highest).

E) Funds A and C (tied for highest).

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Sligo Toys Ltd manufactures wooden toy figures at its Ballinode plant. It has two departments - the Forming Department and the Finishing Department. (Exercises 4.21 and 4.22 focused on the Forming...

Q:

You want to evaluate three mutual funds using the Treynor ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average returns, standard deviations, and betas for...

Q:

15. You want to evaluate three mutual funds using the Treynor ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average returns, standard deviations, and betas...

Q:

15. You want to evaluate three mutual funds using the Treynor ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average returns, standard deviations, and betas...

Q:

15. You want to evaluate three mutual funds using the Treynor ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average returns, standard deviations, and betas...

Q:

8. (3 points) You want to evaluate three mutual funds using the Sharpe ratio for performance evaluation. The risk-free rate during the sample period is 6%. The average returns, standard deviations,...

Q:

QUESTION 13 A pension plan is coligated to make disbursements of $2 million, 53 milion, and $2 million at the end of each of the next three years, respectively. The an interest rate is 10% of the...

Q:

You buy a ten-year bond that has a 6.75% current yield and a 5.00% coupon (paid annually). In one year, promised yields to maturity have fallen to 5.75%. What is your holding- period return? 15.85% O...

Q:

You want to evaluate three mutual funds using the Treynor measure for performance evaluation. The risk-free return during the sample period is 6%. The average returns, standard deviations, and betas...

Q:

You want to evaluate three mutual funds using the Treynor measure for performance evaluation. The risk-free return during the sample period is 6%6. The average returns, standard deviations, and betas...

Q:

You want to evaluate three mutual funds using the Treynor measure for performance evaluation. The risk-free return during the sample period is 6%. The average returns, standard deviations, and betas...

Q:

Calculate how much money a prospective home owner would need for closing costs on a house that costs $100,000. Calculate based on a 20 percent down payment, two discount points on the loan, a...

Q:

Piaggio prepares a cash budget. What is a cash budget? Why must operating budgets and the capital expenditures budget be prepared before the cash budget?

Q:

Find the volume o f the solid enclosed between the paraboloids z = x 2 + y 2 and z = 1 2 1 - x 2 - y 2 . 5 . 5 a Triple Integrals i n Cylindrical Coordinates ( U s e symbolic notation and fractions...

Q:

Next Generation Corporation (a private company) has preferred shares outstanding, which require Next Generation to redeem the shares for cash at an amount equal to fair value of the company's...

Q:

Trelawny Ltd. issued 13,000 common shares upon conversion of 10,000 preferred shares. The preferred shares were originally issued at $9 per share and the Contributed Surplus-Conversion Rights account...

Q:

a. If assets equal $95,000 and liabilities equal $40,000, then owners' equity equals _____. b. If assets equal $65,000 and owners' equity equals $40,000, then liabilities equal _____. c. If current...

Q:

The following T-accounts represent September activity. Required Compute the missing amounts indicated by the letters (a) through(i). Materlala Inventory Work-In-Proceas Inventory BB (9/1 8, 8,000 BB...

Q:

Rocky Mountain General Hospital serves three counties in Colorado. The hospital is a nonprofit organization that is supported by patient billings, county and state funds, and private donations. The...

Q:

Click the icon to view Table 1 . a . What is the cell's current inventory level? The cell's current inventory level is 2 0 5 0 parts. ( Enter your response as a whole number. ) b . What is the takt...

Q:

A 315-foot-tall, 2-million-pound crane collapsed on a construction site in East Toledo, Ohio, killing four ironworkers. Do you think catastrophic failures like this are avoidable? If so, what steps...

Q:

What are some ways of lowering stress that the California Health Foundation emphasizes?

Q:

A safety journal presented some information about what happens when OSHA refers criminal complaints about willful violations of OSHA standards to the U.S. Department of Justice (DOJ). In one 20-year...