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Global Wealth Advisors recently published the following statistics for three of their top - performing mutual funds: Funds Average Return Standard Deviation Beta Horizon Global
Global Wealth Advisors recently published the following statistics for three of their topperforming mutual funds:
Funds
Average Return
Standard Deviation
Beta
Horizon Global Fund
Stellar Growth Fund
Apex Value Fund
The current riskfree rate is and the average market return is
a Emily Wang, a portfolio manager for a large superannuation fund, is considering adding one of the above three mutual funds to her existing welldiversified portfolio.
i Recommend a suitable riskadjusted performance measure that Emily could use to rank these funds for her investment needs. Explain why this measure is appropriate for her investment scenario.
ii Using the recommended measure, determine the bestranked fund among the three listed. Provide calculations to justify your answer.
b David Lee, an individual investor, plans to create a complete portfolio by combining riskfree assets with one of the above three mutual funds.
i Suggest a suitable riskadjusted performance measure that David could use to rank these funds for his investment objectives. Explain why this measure is suitable for his situation.
ii Using the suggested measure, identify the bestranked fund from the list. Provide your calculations to support the answer
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