The following table shows the total return and the number of funds for four categories of mutual funds.

Type of Fund	Number of Funds	Total Return (%)
Domestic Equity	9,191	4.75
International Equity	2,621	18.36
Specialty Stock	1,419	11.15
Hybrid	2,900	6.84

(a)

Using the number of funds as weights, compute the weighted average total return (as a percent) for these mutual funds. (Round your answer to two decimal places.)

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(b)

Is there any difficulty associated with using the "number of funds" as the weights in computing the weighted average total return in part (a)? Discuss.

Score: 1 out of 1

Comment:

What else might be used for weights?

(c)

Suppose you invested $10,000 in this group of mutual funds and diversified the investment by placing $2000 in domestic equity funds, $4000 in international equity funds, $3000 in specialty stock funds, and $1000 in hybrid funds. What is the expected return (as a percent) on the portfolio? (Round your answer to two decimal places.)

%