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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. Average Rena-n Residual Standard Deviation Beta Fund A 20% 4.00% 0.8
Fund B 2l°o l.25°o [.0
Fund C 23% 1.20% 1.2 The fund with the highest information ratio measure is Select one:
C) a. Funds A and B (tied for highest). 0 b. Fund A.
O 6. Fund 0.
0 d. Fund B.
C) e. Funds A and C (tied for highest).

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Subject: Business, Finance

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