Question: 3. Suppose you have 2 mutual funds Whose annual returns are shown in the following table. Assume you invest $1000 in each. and the proceeds


3. Suppose you have 2 mutual funds Whose annual returns are shown in the following table. Assume you invest $1000 in each. and the proceeds from year 1 are reinvested in year 2 and so on. (a) How much money do you accumulate in each fund after 5 years? (b) For each fund, calculate the single annual rate which would yield the same return over the 5year period. Year Fund A Fund B 1 .16 .30 2 .10 ~.10 3 .14 28 4 5 .02 .17 .04 ".02
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