An analyst compared the performance of a hedge fund index with the performance of a major stock index over the past eight years. He noted that the hedge fund index (created from a database) had a higher average return, higher standard deviation, and higher Sharpe ratio than the stock index. All the successful funds that have been in the hedge fund database continued to accept new money over the eight-year period. Are the average return and the standard deviation, respectively, for the hedge fund index most likely overstated or understated（）
A. Both average return and standard deviation are overstated.
B. Average return is overstated and standard deviation is understated.
C. Average return is understated and standard deviation is overstated.