The M-squared measure
A)considers only the return when evaluating mutual funds.
B)considers the risk-adjusted return when evaluating mutual funds.
C)considers only the total risk when evaluating mutual funds.
D)considers only the market risk when evaluating mutual funds.
E)none of the above.

Question

Quizplus · Accepted Answer

The M-squared measure considers the risk-adjusted return when evaluating mutual funds. It measures the excess return of a fund over a benchmark index, adjusted for the fund's beta. Therefore, option B is the correct answer. The other options are incorrect, as they do not capture the entire evaluation criterion for mutual funds.

The M-Squared Measure