WindyRoad is an investment company which has two mutual funds. The WindyRoad Dull Fund invests in...

 

   

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WindyRoad is an investment company which has two mutual funds. The WindyRoad Dull Fund invests in boring corporate bonds, and its Lively Fund invests in "high-risk, high- return" companies. The returns for the two funds in the 5-year period 2017-2021 are given below. (8 points) DULL FUND OR LIVELY FUND? Dell Fund Lively Fund Year 2011 2018 2015 2000 2021 100% 4.29% 4.30% 130% 700% 5.50% return 1130% -14.30% 20.00% 4250% 14.00% 4.77%-AVERAGE C I a. Suppose you had invested $100 in each of the two funds at the beginning of 2016. How much would you have at the end of 2021? b. What was the effective annual interest rate (EAIR) paid by each of the funds over the 5-year period 2017-2021? c. Is there a conclusion you can draw from this example? 1 234567 68 3 DULL FUND OR LIVELY FUND? Dull Fund Lively Fund return return Year 2017 2018 2019 2020 2021 9 Average return 10 8.00% 5.20% 4.30% 3.30% 7.00% 5.56% 11.50% -14.50% -20.00% 42.50% 14.00% 6.70% AVERAGE(C3:C7) WindyRoad is an investment company which has two mutual funds. The WindyRoad Dull Fund invests in boring corporate bonds, and its Lively Fund invests in "high-risk, high- return" companies. The returns for the two funds in the 5-year period 2017-2021 are given below. (8 points) DULL FUND OR LIVELY FUND? Dell Fund Lively Fund Year 2011 2018 2015 2000 2021 100% 4.29% 4.30% 130% 700% 5.50% return 1130% -14.30% 20.00% 4250% 14.00% 4.77%-AVERAGE C I a. Suppose you had invested $100 in each of the two funds at the beginning of 2016. How much would you have at the end of 2021? b. What was the effective annual interest rate (EAIR) paid by each of the funds over the 5-year period 2017-2021? c. Is there a conclusion you can draw from this example? 1 234567 68 3 DULL FUND OR LIVELY FUND? Dull Fund Lively Fund return return Year 2017 2018 2019 2020 2021 9 Average return 10 8.00% 5.20% 4.30% 3.30% 7.00% 5.56% 11.50% -14.50% -20.00% 42.50% 14.00% 6.70% AVERAGE(C3:C7)

Answer rating: 100% (QA)

As calculated in the excel the ending value of 100 invested ... View the full answer