"1. Consider the following three investments. Assume that T-bills yielded a,constant 3 percent. Calculate the risk-adjusted performance of each of,the funds, using the Sharpe measure.,Year A B C,2003 _5% _4% _6%,2004 _0 _1 _1,2005 _5 _4 _10,2006 _8 _10 _18,2007 _5 _5 _7,2. Using the data in Problem 1, calculate the risk-adjusted performance of,an equally weighted portfolio of all three funds, and plot the results in,risk/return space.,3. Using the data in Problem 1, calculate the geometric mean return for,the three funds and for the three-security, equally weighted portfolio.,Rank the investments by descending order of geometric mean. Does this,technique give you the same ranking as the Sharpe measure calculated in,Problem 1?,4. Calculate the time-weighted rate of return for the monthly account activity,shown here:,Cash Flow Month Ending Value,Balance forward $23,000,_200 January 23,556,_200 February 24,556,_500 March 23,965,_500 April 23,100,_200 May 22,900,
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