Question

During the past 10 years, the percent returns on two mutual funds (aggressive and passive) expressed in percentages were as follows: Year Aggressive Fund Passive Fund Last Year Note that this is a sample of returns. a) Compute the expected return for the two funds. Round your answers to two decimal places. Aggressive = Number Passive = Number b) Compute the variance and standard deviation of the returns of the two funds. Round your answers to two decimal places. Variance: Aggressive = Number Passive = Number

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

_ A B Year Aggressive Fund -10 2% - 96% 1% Passive Fund 2% 3% 4% 3% 2% 4% 4% 3% - 67% 5 - 1 % -4 8% -3 1% 2% Last Year 3% 2% 4% 3% 13 14 a) 15 Aggressive Passive Expected Return 3.30% 3.20% 16 18 19 b) Aggressive Passive Variance 0.07% 0.01% Standard deviation 2.67% 0.79%

Cell reference -

B C D Year Aggressive Fund - 10 0.02 0.06 0.01 0.02 0.07 0.01 0.08 0.01 0.02 Last Year 0.03 Passive Fund 0.02 0.03 0.04 0.03 0.04 0.04 0.03 0.02 0.04 0.03 14 a) Expected Return Aggressive =AVERAGE(C3:C12) Passive =AVERAGE(D3:D12) 19 b) Variance Aggressive =VAR.S(C3:C12) Passive =VAR.S(D3:D12) Standard deviation ESTDEV.S(C3:012) ESTDEV.S(D3:012)

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.