Problem: 1 Calculate Standard Deviation for S&P 500 and the four funds listed : 40 points

Problem: 2 Calculate Beta for the four funds 40 points

PROVIDE EXCEL FILE

Percent (%) changes in values in years 2003 through 2012			Fund-1	Fund-2	Fund-3	Fund-4
year		S&P index	small cap stock fund	Large cap Bond fund	Large cap stock fund	Hybrid Fund : Includes Both stocks and bonds
1	2003	28.39	46.44	3.72	30.26	10.77
2	2004	8.75	15.82	1.6	13.7	6.01
3	2005	3.06	3.15	-3.39	6.37	3.23
4	2006	13.64	16.82	-0.96	14.1	7.93
5	2007	3.33	-1.73	-0.08	-0.74	6.7
6	2008	-37.89	-34.08	-5.57	-34.79	-10.53
7	2009	22.52	23.46	3.43	15.29	12.08
8	2010	12.93	25.3	4.11	13.82	9.22
9	2011	-0.09	-5.5	4.9	3.23	3.77
10	2012	12.5	18.04	5.96	19.12	6.54
Problem 1	Standard Dev	?	?	?	?	?
Problem 2	BETA	Base line	?	?	?	?

Problem 3: For each scenario explain, based on the data above and risk parameters assessment (STD deviation and beta) which funds would you recommend and explain why? 40 points

1. Jack would like to make on average 8 % return but is uncomfortable with major drops. Any drop over 15 % in one year makes him nervous.
2. Jill is very nervous investor and even a 10 % drop makes her very uncomfortable.
3. Jane is young and comfortable riding the market over next 30 years.