I bought a fund advertised on the web that says it uses a secret investment strategy to get an annual return twice that of stocks with no risk at all
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I bought a fund advertised on the web that says it uses a secret investment strategy to get an annual return twice that of stocks with no risk at all
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- “The strong form of the efficient-market hypothesis is nonsense. Look at the T. RowePrice Global Technology Fund, which is the best performing mutual fund of the past decade,returning 20.5% annually over the past 10 years, according to Morningstar.”Decide whether the following statement makes sense (or is clearly true) or does not make sense (or is clearly false). Explain your reasoning. I bought a fund advertised on the web that says it uses a secret investment strategy to get an annual return twice that of stocks, with no risk at all.Choose the correct answer below. A.The statement does make sense because this secret investing strategy must be a new financial planning strategy that does not incorporate the three traditional investment considerations: liquidity, risk, and return. B.The statement does not make sense because investing in stocks is low-risk to get high returns, thus getting higher returns than stocks with this secret strategy must mean the fund advertised on the web is low-risk, not no risk. C.The statement does make sense because the strategy indicates that the return is a predictable amount, thus the fund advertised on the web is a no-risk investment. D.The statement does not make sense because…“The strong form of the efficient-market hypothesis is nonsense. Look at the T. Rowe Price Global Technology Fund, which is the best performing mutual fund of the past decade, returning 20.5% annually over the past 10 years, according to Morningstar.” Do you agree with this statement? Discuss your point of view.
- Your friend brags, “It was easy to try to beat the computer in the STAX game. I made $100,000 more with my strategy of actively trading those individual stocks. Why would you want to just buy an index fund? It’s so much fun to try to beat the market!” How would you respond?You are an analyst working for a mutual fund. Your job is to select stocks for the fund. You want to select only one of the following tech stocks to add into your current portfolio: PhoneExp and VegMeat. Both stocks are similar along many metrics. They are all in the technology space and have been growing very fast over the past few years. However, it is hard to get all the information for these stocks, and so far you have collected only the following relevant information to help you make the decision:PhoneExp is a tech firm that focuses on developing and integrating mobile apps. Reading through analyst reports and based on your own judgement, you think the cost of equity for PhoneExp is 12%. PhoneExp estimated earnings per share next year are $10. It pays all its earnings as dividends.VegMeat is a biotech firm that promotes and advocates sustainable food choices. Currently, VegMeat stock is trading at $100/share, with estimated earnings next year of $10/share. You read from their…You are an analyst working for a mutual fund. Your job is to select stocks for the fund. You want to select only one of the following tech stocks to add into your current portfolio: PhoneExp and VegMeat. Both stocks are similar along many metrics. They are all in the technology space and have been growing very fast over the past few years. However, it is hard to get all the information for these stocks, and so far you have collected only the following relevant information to help you make the decision:PhoneExp is a tech firm that focuses on developing and integrating mobile apps. Reading through analyst reports and based on your own judgement, you think the cost of equity for PhoneExp is 12%. PhoneExp estimated earnings per share next year are $10. It pays all its earnings as dividends.VegMeat is a biotech firm that promotes and advocates sustainable food choices. Currently, VegMeat stock is trading at $100/share, with estimated earnings next year of $10/share. You read from their…
- If you desire to forecast performance of a mutual fund for next year, the best forecast will be given by the a. geometric average return b. neither geometric average return nor arithmetic average return c. arithmetic average return d. both geometric average return and arithmetic average return You buy and hold a S&P 500 index fund. You always reinvest your dividends earned on the fund. Which method provides the best measure of the actual average historical performance of the investments you have chosen? a. both geometric average return and arithmetic average return b. neither geometric average return nor arithmetic average return c. arithmetic average return d. geometric average returnElsie is an investor considering investing in an actively managed equity fund. The Fund has a return of 8%; the risk-free rate was 2% and the market portfolio returned 8%. The Fund had a target Beta of 1.40, but was actually 1.30. The fund had a standard deviation of 20%, and the market had a standard deviation of 12%. Calculate - Sharpe ratio Calculate - Treynor RatioA pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15 % 32 % Bond fund (B) 9 % 23 % The correlation between the fund returns is 0.15. a. What would be the investment proportions of your portfolio if you were limited to only the stock and bond funds and the portfolio has to yield an expected return of 12%?
- A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 6%. The probability distribution of the risky funds is as follows: E(r) st. dev. stock fund .24 .33 bond fund .14 .22 The correlation between the fund returns is 0.14. You require that your portfolio yield an expected return of 16%, and that it be efficient, on the best feasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) b. What is the proportion invested in the T-bill fund and each of the two risky funds? (Round your answers to 2 decimal places.)The fund created by JPM to exploit overconfidence, loss aversion and momentum biases is described on their website: The ticker symbol for the fund is JIVAX. It was launched in 2005. Question: From JP Morgan's website, What has been the return to the S&P 500 from 1/31/2005 to current date? Please provide the starting price, ending price and return over the time period.A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: expected return Standard Deviation Stock fund 19% 34% Bond Fund 10 18 The correlation between the fund returns is 0.11. Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) Protifolio invested in stock Protifolio invested in bond expected return standard deviation