Question
Consider the following performance history of Radius mutual fund relative to the market. Date Radius Market 1 11% 5% 2 4% 3% 3 2% 4%
Consider the following performance history of Radius mutual fund relative to the market.
| Date | Radius | Market |
| 1 | 11% | 5% |
| 2 | 4% | 3% |
| 3 | 2% | 4% |
| 4 | 6% | 0% |
The risk-free rate is 2%.
a) Did Radius outperform the market? By how much?
b) Please compare the Sharpe Ratio of Radius to that of the market portfolio. Which is a better investment based on the Sharpe Ratio analysis?
c) What is the M2 measure of Radius Fund?
d) Please compare the Treynor Ratio of Radius to that of the market? Which is a better investment based on the Treynor Ratio analysis?
e) What is the alpha of Radius?
f) What is the Information Ratio of Radius?
g) Would you like to add some investment in the Radius fund to your market portfolio?
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Personal Finance
Authors: Jack R Kapoor, Glencoe McGraw Hill, Les R Dlabay, Robert J Hughes
1st Edition
0078698006, 9780078698002
