Question
You wish to compare the performance of two different mutual funds. Return p M_Fund A 0.1035 1.2 M_Fund B 0.1095 1.4 During the same period,
You wish to compare the performance of two different mutual funds. Return p M_Fund A 0.1035 1.2 M_Fund B 0.1095 1.4 During the same period, returns for the following were: S&P500 0.0975 rf 0.0775 Which mutual fund performed better on a risk-adjusted basis, i.e. RE: alpha? Pick the best answer, e.g. less negative alpha -- closer to 0 -- is better.
M_Fund B had higher alpha than M_Fund A
Both funds beat the benchmark S&P
M_Fund A had higher alpha than M_Fund B
M_Fund B delivered positive alpha
Both funds delivered the same alpha or risk-adjusted returns
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