You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The average risk-free return during the sample period is 3% p.a., and the average return on the market portfolio is 12% p.a. The average return, beta and residual standard deviation for the three funds are given below.

The fund with the highest information ratio measure is

a.

Fund A.

b.

Funds A and C (tied for highest).

c.

Fund B.

d.

Fund C.

e.

Funds A and B (tied for highest).