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Section B: Short Questions [ 6 Questions; 1 1 0 Marks ] Question 1 Performance Evaluation ( 2 0 Marks ) You are a financial
Section B: Short Questions Questions; Marks
Question Performance Evaluation Marks
You are a financial advisor at a local investment company in Johannesburg. A client has come
to you for professional advice. Based on the clients investment objectives and constraints, you
have identified two possible funds: Fund A and Fund B You have gathered the following
information to assist you with advising your client:
Fund A Fund B JSE All Share
Index market
portfolio
Treasury Bills
Average return
Standard
deviation
Beta
Residual
standard
deviation
Required:
Advise your client on which fund should be selected based on the Sharpe ratio and the M
measure. marks
Advise your client on which fund should be selected based on the Treynor ratio and the T
measure. marks
Advise your client of your final recommendation if the selected fund is going to be a standalone fund that will not be combined with other securities marks
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