Consider the following summary measures for the annual returns for Vanguards Energy Fund and Vanguards Health Care

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Consider the following summary measures for the annual returns for Vanguard’s Energy Fund and Vanguard’s Health Care Fund from 2005 through 2017.

Energy: x̅ = 9.62% and s = 23.58%
Health Care: x̅ = 12.38% and s = 15.45%

a. Which fund had the higher average return?

b. Which fund was riskier over this time period? Given your answer in part (a), is this result surprising? Explain.

c. Given a risk-free rate of 3%, which fund has the higher Sharpe ratio? What does this ratio imply?

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Essentials Of Business Statistics Communicating With Numbers

ISBN: 9781260547658

2nd Edition

Authors: Sanjiv Jaggia, Alison Kelly

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Question Posted: Oct 02, 2019 10:47 AM

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Consider the following summary measures for the annual returns for Vanguards Energy Fund and Vanguards Health Care

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a The Vanguard Health Care Fund has a higher average return b The Vanguard Energy Fund has a hig...View the full answer

Essentials Of Business Statistics Communicating With Numbers

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