According to the Morningstar.com website, the 2004 total return percentages for several popular funds were as follows:
2004
Fund Total Return %
Vanguard 500 Index...................10.7
Wasatch Core Growth .................21.7
Fidelity Stock Selector..................9.9
Fidelity Dividend Growth.............5.8
Janus Worldwide........................5.5
Suppose that an investor had $100,000 invested in the Vanguard 500 Index fund, $500,000 invested in the Wasatch Core Growth fund, $500,000 invested in the Fidelity Stock Selector fund, $200,000 invested in the Fidelity Dividend Growth fund, and $50,000 invested in the Janus Worldwide fund.
a. Compute a weighted mean that measures the 2004 average total return for the investor's portfolio.
b. Compare your weighted mean with the unweighted mean of the live total return percentages. Explain why they differ.