Q. You want to evaluate the performance of three funds using well-known relative performance evaluation measures. The risk-free return during the sample period is 6% and the market return is 11%. The average returns, standard deviations, betas and tracking errors for the three funds and ASX 200 index are given below.

	Average Return	Standard Deviation	Beta	Tracking Error
Fund A	24%	30%	1.6	1.2%
Fund B	12%	16%	0.6	0.5%
Fund C	22%	20%	1.1	1.5%
ASX 200	11%	10%	1.0	NA

1. Calculate the Treynor measure for each fund. Which fund has the highest Treynor measure? (2 marks)
2. Calculate the Sharpe measure for each fund. Which fund has the highest Sharpe measure? (2 marks)
3. Calculate the Jensen alpha measure for each fund. Which fund has the highest Jensen alpha measure? (2 marks)
4. Calculate the Information Ratio measure for each fund. Which fund has the highest Information Ratio? (2 marks)
5. Based on the relative performance measures calculated, which fund would you recommend investing in and why? (2 marks)