Suppose the rates of return (in %) over the past 6 years for two mutual funds...
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Suppose the rates of return (in %) over the past 6 years for two mutual funds are as follows: Year Fund A Fund B 1 8.3 12 2 -6.0 -4.8 3 18.9 6.4 4 -5.7 10.2 5 23.6 25.3 6 20 1.4 a. Compute the mean and standard deviation of Fund A. b. Compute the mean and standard deviation of Fund B. c. Compute the coefficient of variation (CV), which is defined as the ratio of standard deviation over mean, and sometimes expressed in percentage (x100%), for Fund A and B. d. In practice, CV is often used as a measure of risk because it measures the variation of the returns relative to the mean return. Based on the computed CV in (c), which fund do you think has a higher investment risk? Suppose the rates of return (in %) over the past 6 years for two mutual funds are as follows: Year Fund A Fund B 1 8.3 12 2 -6.0 -4.8 3 18.9 6.4 4 -5.7 10.2 5 23.6 25.3 6 20 1.4 a. Compute the mean and standard deviation of Fund A. b. Compute the mean and standard deviation of Fund B. c. Compute the coefficient of variation (CV), which is defined as the ratio of standard deviation over mean, and sometimes expressed in percentage (x100%), for Fund A and B. d. In practice, CV is often used as a measure of risk because it measures the variation of the returns relative to the mean return. Based on the computed CV in (c), which fund do you think has a higher investment risk?
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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