The risk-free rate, average returns, standard deviations, and betas for three funds and the S&P 500 are given below. Suppose the risk-free rate = 4.

Fund	Avg	Std Dev	Beta
A	10.6	40	1.4
B	12.6	25	0.9

• Compute the Treynor measure for Fund A and Sharpe ratio for Fund B. Suppose a = A's Treynor ratio and b = B's Sharpe ratio. Compute a + b and enter your answer below. Disregard % and just use the given numbers as is.
  • For example, if a = 1.3 and = 0.7, then your answer should be 2.00.
  • Round your answer to two decimal places.
• Which fund performs better with respect to Treynor and Sharpe?