Which of the following statements is correct?

1. High-yield mutual bond funds are affected by both interest rate changes and changes in the economic performance of the company issuing the bonds.

2. Risk-adjusted performance can best be measured by beta.

3. An investor who wants to rank a list of diversified mutual funds can feel comfortable using the Treynor index.

4. If an investor wants to rank a list of sector funds, the Treynor index is more appropriate than the Sharpe ratio.

a. II only b. I and IV only c. I and III only d. II and IV only