Question: Please show work clearly and neat and circle answer. Answer 1-3 Problem #5. Mutual Fund Exercise This problem is similar to the exercise we did
Problem #5. Mutual Fund Exercise This problem is similar to the exercise we did in FLBAX, exercise for US comprised class, w hich was for of long term US government bonds. Let's do a similar corporate bonds. FAGXs a High Yield (HY) corporate bond fund, where the bonds are rated below investment grade. Please Pefer to the data sheet on FAGIX, and the fund valuations, which are shown below. Ticker Fidelity Mutual Fund FLBAX Long Term Treasury Bond FAGIX Capital &e Income (High Yield) $10,000 $18,458 $25,851 FUSVX S8eP500 Index 9/30/08 9/30/13 9/30/18 $10,000 $13,611 $16,810 $10,000 $16,099 $30,869 1) You invested $10,000 in FAGIX (High Yield Corporate Bonds) on 9/30/08 and sold it on 9/30/18. What was your average annual return (or "geometric average return"); that is, how much did you earn on average, each year? Show keystrokes and work. 2) A. Which fund has higher interest rate risk? A) FAGX B) FBLAX 2) B. Which fund has higher credit risk? A) FAGIX B) FBLAX 3) What is the benchmark for FAGIX? A) S&eP500 Index B) Russell 2000 Index C) EAFE Index D) 3-month Treasury Bills E) None of the above
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