Comparison of Sharpe Ratios for Two Funds

Consider the following scenario: An investor has evaluated the performance of two mutual funds over the past year. Fund A had a return of 12% with a standard deviation of 8%, while Fund B had a return of 10% with a standard deviation of 6%. To assess which fund performed better relative to the risk taken by each, the investor decided to use the Sharpe Ratio. The Sharpe Ratio is calculated as the difference between the fund's return and the risk-free rate, divided by the standard deviation of the fund's return.

Assuming the risk-free rate is 2%, which fund has the higher Sharpe Ratio?