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Please help ASAP (10) 3. You have been assigned to a team charged with evaluating the management of your company's pension fund. The pension fund

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(10) 3. You have been assigned to a team charged with evaluating the management of your company's pension fund. The pension fund has $400 million in total assets and is managed by an outside firm, Wilbur Associates. Over the past year, Wilbur Associates has achieved an overall return of .100 (10.0%); its beta was 1.0 and its standard deviation of return (i.e., sigma) was .200 (20.0%). There is one other firm, Rudy Associates, seriously interested in managing your pension fund. Over the past year, Rudy Associates has achieved an overall return of .145 (14.5%); its beta was 1.50 and its standard deviation of return (i.e., sigma) was .400 (40.0%). In general, your company uses the Standard & Poor's 500 (S&P500) as a suitable benchmark portfolio. Over the last year, the S&P500 has achieved a return of .100 (10.0%) with a beta of one (1.0) and a standard deviation (i.e., sigma) of .200 (20.0%). Over that same period, Treasury Bills have returned .010 (1.0%). Which fund management firm would you recommend, Wilbur, Rudy, or neither? Explain your answer. (NOTE: If you do the necessary calculations more than one way, be sure to clearly indicate which calculation method is correct; or, if you believe your different approaches are equivalent, clearly indicate this also.) (10) 3. You have been assigned to a team charged with evaluating the management of your company's pension fund. The pension fund has $400 million in total assets and is managed by an outside firm, Wilbur Associates. Over the past year, Wilbur Associates has achieved an overall return of .100 (10.0%); its beta was 1.0 and its standard deviation of return (i.e., sigma) was .200 (20.0%). There is one other firm, Rudy Associates, seriously interested in managing your pension fund. Over the past year, Rudy Associates has achieved an overall return of .145 (14.5%); its beta was 1.50 and its standard deviation of return (i.e., sigma) was .400 (40.0%). In general, your company uses the Standard & Poor's 500 (S&P500) as a suitable benchmark portfolio. Over the last year, the S&P500 has achieved a return of .100 (10.0%) with a beta of one (1.0) and a standard deviation (i.e., sigma) of .200 (20.0%). Over that same period, Treasury Bills have returned .010 (1.0%). Which fund management firm would you recommend, Wilbur, Rudy, or neither? Explain your answer. (NOTE: If you do the necessary calculations more than one way, be sure to clearly indicate which calculation method is correct; or, if you believe your different approaches are equivalent, clearly indicate this also.)

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