You are given the following information on three funds. The risk free rate is 6 %. Calculate the differential return measure. Interpret your findings. Fund G H | Actual Return 15 25 30 Market Return 20 20 20 Sigma² 16 25 36

You are given the following information on three funds. The risk free rate is 6 %. Calculate the differential return measure. Interpret your findings. Fund G H | Actual Return 15 25 30 Market Return 20 20 20 Sigma² 16 25 36

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter11: Risk-adjusted Expected Rates Of Return And The Dividends Valuation Approach

Section: Chapter Questions

Problem 4QE

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Question

Activity 3
You are given the following information on three funds. The risk free rate is 6%.
Calculate the differential return measure. Interpret your findings.
Fund
CH-
G
I
Actual
Return
15
25
30
Market
Return
20
20
20
Sigma²
16
25
36

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