1. Answer the following questions using the contextual information provided in Figures 1 a and 1 b:

1. For this context, critically evaluate the essential qualities of the SPDR Exchange Traded Fund and the Vanguard 500 Index Trust Mutual Fund in terms of their structures, their pricing, their classifications, and fund strategy.

(7 marks)

2. For this context, critically evaluate the historical return performance including tracking indicators.

(4 marks)

B. Historical Return Performance Enter all values and hit 96) Create Reports 97 Show Definitions Total Retum Performance Tracking Stats Seasonality Source Single Fund SPY US Equity Benchmark Single Index Week Portfolio Default 0 Hist Sim Historical Fund Analysis SPX Index Currency USD Range 06/29/2007 05/31/2017 Od Monthly O 820614 Tracking Indicators Alpha Beta Correlation Mean Excess Return Information Ratio Jensen Alpha R-Squared Sortino Ratio Vs Index Tracking Error Total 0.000 0.997 0.999 -0.106 -0.210 120514 Bull Bear -0.018 -0.059 1.003 0.987 0.998 0.998 -0.1021 -0.114 -0.253 -0.1731 -0.2861 -0.5701 0.997 -0.015 0.0001 0.6611 -0.099 0.998 0.000 0.997 -1.2006 0.507 0.404 6.79566 Legend First Observation o 54 Winning Periods O 65 Losing Periods 07/31/2007 Regression Line Breakeven Line -11.79486 If the returns are mainly over the breakeven line, -16.7986 the fund could be seen as a performance winner. -16.79486 11.79-186 6.7986 1.79696 320510 8.20516 X-S&P SOO INDEX Australia 61 2 9777 8600 Brazil 5511 2395 9000 Europe 44 20 7330 7500 Germany 49 69 92041210 Hong Kong 852 2977 6000 Japan 813 3201 8900 Singapore 65 6212 1000 U.S.1 212 318 2000 SN 335.97 215.60 GAS 2048 Sab jun-2017 15:33:00 Source: 2017 Bloomberg L.P. All rights reserved. Reprinted with permission. Source 120514 SN335716CDT GMT 5600 der Finance LP B. Historical Return Performance Enter all values and hit 96) Create Reports 97) Show Definitions Historical Fund Analysis Total Return Performance Tracking Stats Seasonality Single Fund VFINX US Equity Benchmark Primary Benchmark SPX Index Week Portfolio Default O Hist Sim Currency USD Range 06/29/2007 05/31/2017 Od Monthly Tracking Indicators Total Bull Bear Alpha 0.000 -0.010 -0.011 Beta 0.999 1.000 0.999 Correlation 1.000 0.999 0.999 Mean Excess Return -0.114 -0.115 -0.112 Information Ratio -3.063 -3.835 -2.333 Jensen Alpha -0.122 -0.175 -0.092 R-Squared 0.999 0.999 0.999 Sortino Ratio Vs Index 0.000 -0.017 0.000 Tracking Error 0.037 0.030 0.048 Legend First Observation 07/31/2007 o 14 Winning Periods 11.79-86 Regression Line o 105 Losing Periods Breakeven Line If the returns are mainly over the breakeven line, 16.79.86 the fund could be seen as a performance winner. - 04 x-SAS INDEX Australia 61 2 9777 8600 Brazil 5511 2395 9000 Europe 44 20 7330 7500 Germany 49 69 9204 1210 Hong Kong 852 2977 6000 Japan 81 33201 8900 Singapore 65 6212 1000 US. 1 212 318 2000 4046-019-Jun-2017 15:33:38 -1.79486 694 -11.74 - Source: 2017 Bloomberg L.P. All rights reserved. B. Historical Return Performance Enter all values and hit 96) Create Reports 97 Show Definitions Total Retum Performance Tracking Stats Seasonality Source Single Fund SPY US Equity Benchmark Single Index Week Portfolio Default 0 Hist Sim Historical Fund Analysis SPX Index Currency USD Range 06/29/2007 05/31/2017 Od Monthly O 820614 Tracking Indicators Alpha Beta Correlation Mean Excess Return Information Ratio Jensen Alpha R-Squared Sortino Ratio Vs Index Tracking Error Total 0.000 0.997 0.999 -0.106 -0.210 120514 Bull Bear -0.018 -0.059 1.003 0.987 0.998 0.998 -0.1021 -0.114 -0.253 -0.1731 -0.2861 -0.5701 0.997 -0.015 0.0001 0.6611 -0.099 0.998 0.000 0.997 -1.2006 0.507 0.404 6.79566 Legend First Observation o 54 Winning Periods O 65 Losing Periods 07/31/2007 Regression Line Breakeven Line -11.79486 If the returns are mainly over the breakeven line, -16.7986 the fund could be seen as a performance winner. -16.79486 11.79-186 6.7986 1.79696 320510 8.20516 X-S&P SOO INDEX Australia 61 2 9777 8600 Brazil 5511 2395 9000 Europe 44 20 7330 7500 Germany 49 69 92041210 Hong Kong 852 2977 6000 Japan 813 3201 8900 Singapore 65 6212 1000 U.S.1 212 318 2000 SN 335.97 215.60 GAS 2048 Sab jun-2017 15:33:00 Source: 2017 Bloomberg L.P. All rights reserved. Reprinted with permission. Source 120514 SN335716CDT GMT 5600 der Finance LP B. Historical Return Performance Enter all values and hit 96) Create Reports 97) Show Definitions Historical Fund Analysis Total Return Performance Tracking Stats Seasonality Single Fund VFINX US Equity Benchmark Primary Benchmark SPX Index Week Portfolio Default O Hist Sim Currency USD Range 06/29/2007 05/31/2017 Od Monthly Tracking Indicators Total Bull Bear Alpha 0.000 -0.010 -0.011 Beta 0.999 1.000 0.999 Correlation 1.000 0.999 0.999 Mean Excess Return -0.114 -0.115 -0.112 Information Ratio -3.063 -3.835 -2.333 Jensen Alpha -0.122 -0.175 -0.092 R-Squared 0.999 0.999 0.999 Sortino Ratio Vs Index 0.000 -0.017 0.000 Tracking Error 0.037 0.030 0.048 Legend First Observation 07/31/2007 o 14 Winning Periods 11.79-86 Regression Line o 105 Losing Periods Breakeven Line If the returns are mainly over the breakeven line, 16.79.86 the fund could be seen as a performance winner. - 04 x-SAS INDEX Australia 61 2 9777 8600 Brazil 5511 2395 9000 Europe 44 20 7330 7500 Germany 49 69 9204 1210 Hong Kong 852 2977 6000 Japan 81 33201 8900 Singapore 65 6212 1000 US. 1 212 318 2000 4046-019-Jun-2017 15:33:38 -1.79486 694 -11.74 - Source: 2017 Bloomberg L.P. All rights reserved