A grandfather has been saving money each year for his granddaughters graduation from college. When she was
Question:
A grandfather has been saving money each year for his granddaughter’s graduation from college. When she was born May 31st 2000, he invested $1,000 into an ETF that tracked the S&P500 Index. On her next seven birthdays, the grandfather invested an additional $1,000 each birthday. Grandfather lost his job during the great financial crisis of 2008/9 and made no further investments for the next five birthdays the last birthday being her 12th – in fact, on his granddaughter’s 10th birthday, grandfather actually took $200 out of the ETF investment to pay for a birthday gift! Grandfather officially retired, and began drawing social security. For birthdays 13 through 20, he invested an additional $500 each birthday.On her 21st birthday, which conveniently was her date of graduation, grandfather sold the entire ETF investment and present his granddaughter with the proceeds of $34,600. Ignoring taxes, and assuming there were no other payments into the investment or monies withdrawn other than those described above, what is the annual money-weighted return of this investment?
The following data relates to a large cap mutual fund. Over the last 2 years, monthly returns, including dividend reinvestment were as follows:
Jul-2021 Jun-2021 May-2021 Apr-2021 Mar-2021 Feb-2021 Jan-2021 Dec-2020 Nov-2020 Oct-2020 Sep-2020 Aug-2020
1.35% 1.25% -0.08%
Jul-2020 Jun-2020 May-2020
7.57% 2.38% 1.69% 4.26% 11.08% -13.74% -10.07% -0.99% 1.74% 3.72% 0.48% 1.95%
1.93% Apr-2020 2.71% Mar-2020 6.62% Feb-2020 3.17% Jan-2020
-2.04% Dec-2019 3.27% Nov-2019 11.84% Oct-2019 -4.61% Sep-2019 -2.28% Aug-2019
Calculate the arithmetic mean monthly return.
Calculate the geometric mean monthly return.
Calculate the annual holding period return.
If an investor invested $1 in this mutual fund at the beginning of the two-year period, how much
would the $1 be worth at the end, assuming dividends are reinvested?
Estimate the monthly standard deviation of the mutual fund’s returns.
Estimate the annual standard deviation of the mutual fund’s returns.
