The reward-to-risk relationship can be evaluated here by comparing each fund ' s return with its standard deviation, which measures volatility. Calculate return ÷ standard deviation for each fund. Fund A produces 7 ÷ 11 = 0.636 . Fund B produces 9 ÷ 13 = 0.692 . Fund C produces 11 ÷ 15 = 0.733 . Fund D produces 14 ÷ 18 = 0.778 . Therefore, Fund D provides the greatest amount of return for each unit of volatility among the four alternatives. Standard deviation alone should not be considered without the return being generated for taking that risk. Although Fund D has the highest absolute standard deviation, it also generates sufficiently higher return to produce the strongest reward-to-risk relationship. Therefore, Fund D—listed as Option C—is correct.

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