0 QUESTION 43 The stock price of Apax Inc. is currently $105. The stock price a year from now will be either $130 or $90 with equal probabilities. The interest rate at which investors can borrow is 10%. Using the binomial OPM, the value of a call option with an exercise price of $110 and an expiration date 1 year from now should be worth today $11.59 $20.18 $40.66 $15.32 0.3333 QUESTION 45 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 Standard Average Return Deviation Beta Fund A 20% 4.0096 0.8 Fund B 2196 1.25% 1.0 Fund C 2396 1.2096 1.2 The fund with the highest information ratio measure is Fund A Fund B. Fund Funds A and C (tied for highest) Funds A and B (tied for highest)