You have time traveled back to the year 2010 (you may assume you brought the newest version of Excel with you). Rebecca Johnson works as an investment counselor at a large bank. Recently, an inexperienced investor asked Johnson about clarifying some differences between two top-performing mutual funds:
Vanguard’s Precious Metals and Mining fund (henceforth, Metals) and Fidelity’s Strategic Income fund (henceforth, Income). The investor shows Johnson the return data that he has accessed over the internet, but the investor has trouble interpreting the data. Johnson is extremely busy so she asked you and your team to:

Johnson would like you to explain to the investor:
1. The typical return of the mutual funds (hint: consider measures of central tendency and the differences between them as well as what they tell you about the shape of the distribution.
2. The investment risk of the mutual funds (hint: consider measures of spread/variation and assess if there are any outliers- you will need to look into how to do this).
Please write up a summary thoroughly explaining the above and recommendations you would make to the investor. You will want to consider if your advice would be different if they are able to make more risks (farther from retirement) or not.

Transcribed Image Text:

1 Year 2 w N 3 4 5 6 7 8 9 10 11 12 13 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sum Aver Metals Income -7.34 4.07 18.33 6.52 33.35 9.38 59.45 18.62 8.09 9.44 43.79 3.12 34.3 8.15 36.13 5.44 -56.02 -11.37 76.46 31.77 246.54 85.14 24.654 8.514 1 Year 2 w N 3 4 5 6 7 8 9 10 11 12 13 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sum Aver Metals Income -7.34 4.07 18.33 6.52 33.35 9.38 59.45 18.62 8.09 9.44 43.79 3.12 34.3 8.15 36.13 5.44 -56.02 -11.37 76.46 31.77 246.54 85.14 24.654 8.514

Answer rating: 100% (QA)

Step 14 Answer Year Total MeanAverage X Analysis of risk and return of both the fund Metals and Mining fund 200000 200100 3999 200200 7562 200300 1210... View the full answer