The following returns were earned last year: Fund A,10%,Fund B,20%,the overall market,11%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,both funds would have been good investments.

Question

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Fund A underperformed the market given its lower return (10%) compared to the overall market (11%), despite having a lower risk (beta of 0.8). Fund B, with a higher beta of 2.0, indicates higher risk but provided a higher return (20%) than the market, which could be considered a good investment for those willing to accept the higher risk. The statement's generalization that both funds were good investments does not account for the risk-return trade-off.

The Following Returns Were Earned Last Year: Fund A,10%,Fund B,20%,the