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Business, 03.07.2020 18:01 aa985960

The risk-free rate, average returns, standard deviations, and betas for three funds 500 are given below. Fund Average Standard Deviation Beta
A 18% 30% 1.05
B 25% 35% 1.30
C 20% 25% 1.2
S&p 500 15% 20% 1.0
rf 5%

If these portfolios are subcomponents that makeup part of a well-diversified portfolio, then the portfolio is --preferred.

The average returns, standard deviations, and betas for three funds are given below along with data for the S&P 500 Index. The risk-free return during the sample period is 6%.

Fund Avg Std Dev Beta
A 13.6% 40% 1.1
B 13.1% 25% 1.0
C 12.4% 30% 1.3
S&P 500 12.0% 15% 1.0

You want to evaluate the three mutual funds using the Sharpe ratio for performance evaluation. The fund with the highest Sharpe ratio of performance is.

a. fund A
b. fund B
c. fund C
d. The answer cannot be determined from the information given.

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