Multiple choice

The best equity fund, relative to others, would have

  1. higher Ex Marks, lower Beta and higher gross Dividend Yield

  2. higher Ex Marks, higher Beta and higher gross dividend yield

  3. lower Ex Marks, lower Beta and lower gross dividend yield

  4. lower Ex Marks, higher Beta and higher gross dividend yield
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For an equity fund, higher excess marks (risk-adjusted returns above benchmark) indicate better performance, lower beta indicates lower volatility/risk, and higher dividend yield provides regular income - making option A the most desirable combination. Higher beta (option B) means more volatility/risk, which is generally less desirable for the same level of returns. Lower excess marks and lower dividend yield (options C and D) are clearly inferior. This question tests understanding of multiple fund quality indicators and their ideal combinations.

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