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A pension plan manager is considering investing in one of the two actively managed funds (G or H) under two situations. Some performance measures of
A pension plan manager is considering investing in one of the two actively managed funds (G or H) under two situations. Some performance measures of the two funds and those for the S\&P 500 index are as follows: i) Which fund (G or H) should be included in the pension plan's current portfolio, which is a well-diversified portfolio that mimics the S\&P 500 index? Explain and support your choice with the appropriate risk-adjusted performance measure from the above table. ii) Which fund (G or H) should be selected by the pension plan if the selected fund is the very first risky fund to be included in the pension plan (i.e., the pension plan has just started without any investment yet)? Explain and support your choice with the appropriate risk-adjusted performance measure from the above table
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