$\begin{array}{llcl}
\underline{\text { SD }} &\underline{ \text { Beta} }&\underline{\text { alpha }} &\underline{\mathrm{R}^{2}}\
\text { Fund 1 1.97 } & 1.0 & 1.3 & 0.95 \
\text { Fund 22.94 } & 0.8 & 0.6^{*} & 0.80 \
\text { Fund 33.82 } & 1.2 & -3.5 & 0.90 \
\text { Fund 44.70 } & 1.4 & 4.2 & 0.65
\end{array}$

-Which of the funds' returns are best explained by the market's returns?
A)Fund 1
B)Fund 2
C)Fund 3
D)Fund 4

Question

$\begin{array}{llcl}
\underline{\text { SD }} &\underline{ \text { Beta} }&\underline{\text { alpha }} &\underline{\mathrm{R}^{2}}\
\text { Fund 1 1.97 } & 1.0 & 1.3 & 0.95 \
\text { Fund 22.94 } & 0.8 & 0.6^{*} & 0.80 \
\text { Fund 33.82 } & 1.2 & -3.5 & 0.90 \
\text { Fund 44.70 } & 1.4 & 4.2 & 0.65
\end{array}$

-Which of the funds' returns are best explained by the market's returns?
A)Fund 1
B)Fund 2
C)Fund 3
D)Fund 4

Quizplus · Accepted Answer

Fund 1 has the highest R-squared value (0.95), which indicates that its returns are best explained by the market's returns.

-Which of the Funds' Returns Are Best Explained by the alpha