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Problem #2 (9 Marks) Annual returns for CSH Fund are listed below. Year Return 2019 -19.9% 2018 16.6% 2017 18.0% 20161-50.0%
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Answer #1

N Year M Return 2010 -3% 2011 45.20% 2012 45.60% 2013 -16.5% 2014 1.20% 2015 43.30% 2016 -50% 2017 18% 2018 16.60% 2019 -19.9

M N Year Return 2 2010 -0.03 =1+M2 2011 0.452 =1+M3 2012 0.456 =1+M4 5 2013 -0.165 =1+M5 6 2014 0.012 =1+M6 2015 0.433 =1+M7

Answer a:
The value of arithmetic average return is 8.05%

Answer b:
Value of geometric average return is 3.1857%

Answer c:
At the end of year 2019 the amount will be equal to (Initial investment)*(1+Geometric average return)^(2019-2010)
=(1000)*(1+3.1857%)^10
=1000*1.3683435=1368.3435
Answer: So, the amount at the end of 2019 will be $1368.3435

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