The following table shows the total return and the number of funds for four categories of mutual
Question:
The following table shows the total return and the number of funds for four categories of mutual funds.
a. Using the number of funds as weights, compute the weighted average total return for these mutual funds.
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. 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 on the portfolio?
Mutual FundsMutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Step by Step Answer:
a 1260041416131 781 The weighted average total return for the Morningstar funds is 781 b ...View the full answer
Modern Business Statistics With Microsoft Excel
ISBN: 9781337115186
6th Edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
