INVESTMENTS (LOOSELEAF) W/CONNECT
11th Edition
ISBN: 9781260465945
Author: Bodie
Publisher: MCG
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Chapter 4, Problem 25PS
Summary Introduction
To determine:
Whether conclusion warranted, considering that the investor observed the performance associated with the 350 managers of portfolio for 5 years and ranking them on the basis of return provided by the investment during the year. It has been identified by the investor that there exist a total of 11 funds the return from which is able to exist in top half of the entire sample.
Introduction:
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Students have asked these similar questions
You are an advisor reviewing fund managers performance over the last year. Your
records indicate that government bonds have returned 5% over the period. You have
also obtained the following information:
Return Standard deviation Beta
Market portfolio 0.148 0.52
Fund manager W 0.148 0.36 0.18
Fund manager X 0.160 0.34 0.16
Fund manager Y 0.114 0.34 2.60
Fund manager Z 0.158 0.56 1.80
Given the information above, which fund manager’s performance shows it lies on the
Capital Market Line?
Fund manager W.
Fund manager X.
Fund manager Y.
Fund manager Z.
Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Which mutual fund performed better? Please show steps in Excel
Year Stivers Trippi
1 11,000 5,600
2 12,000 6,300
3 13,000 6,900
4 14,000 7,600
5 15,000 8,500
6 16,000 9,200
7 17,000 9,900
8 18,000 10,600
I need someone to check my answer
In a recent 5-year period, mutual fund manager Diana Sauros produced the following percentage rates of return for the Mesozoic fund. Rates of return on the market index are given for comparison
Year
Fund Return (%)
Standard deviation mean
Deviation 2
Market index return (%)
Standard Deviation (Mean)
Deviation2
1
-1.4
-16.52
272.91
-0.5
-11.8
139.24
2
24.0
8.88
77.44
16.0
4.7
22.09
3
41.9
26.78
717.17
31.4
20.1
404.01
4
10.9
-4.22
17.81
9.9
-1.4
1.96
5
0.2
-14.92
222.61
-0.3
-11.6
134.56
TOTAL
75.6
1,307.94 56.5
701.86
AVERAGE
15.12
261.59 11.3
140.37
SD
16.17
11.85
Calculate
The average return on Mesozoic Fund Return and Market Portfolio Return
Fund return = (-1.4+24+41.9+10.9+0.2)/5 = 15.12
Market index return = -0.5+16+31.4+9.9+ (-0.3)]/5 =…
Chapter 4 Solutions
INVESTMENTS (LOOSELEAF) W/CONNECT
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