In Its Prospectus, the YourMoney Mutual Fund Provides Charts and Tables

In its prospectus, the YourMoney Mutual Fund provides charts and tables of its average annual return over the past year, three years, five years, and ten years. The fund's return has indeed been phenomenal over this time period, beating the S&P 500 Index by at least 15%. The prospectus states that this is because the fund invests in securities that are riskier and that, therefore, an investor can expect the fund to continue earning a return higher than the S&P 500 Index. Is YourMoney guilty of any security violations?

A) No. YourMoney properly revealed to prospective investors the fact that its higher than average returns are the result of its investment in riskier securities.
B) Yes. There is no way the fund could have beaten the S&P 500 Index by at least 15% over the past ten years. The fund is obviously misstating its returns.
C) Yes. YourMoney is guilty of fraud in claiming that "an investor can expect the fund to continue earning a return higher than the S&P 500 Index." Past performance is no indication of future performance.
D) No. Regulations require only that the mutual fund provide charts and tables of its average annual returns, with a statement comparing the fund performance with a relevant market index.YourMoney has done this and more.