Question

My Add-ins Pivot Table Recommended Table Pivot Tables Pictures Online Shapes Icons Pictures Models Illustrations Add-ins Tables Checked Checked Volatility 3. Consider two funds that start with $1.000 and have returns as shown below. 4 Fund #1 5 Return Year Beg Balm $ Return Withdrawal End Bal 6 -12.9% 1000 8 12.9% 10 -18.3% 15.8% 15.0% 17 Fund #2 18 Return 19 -18.9% Year Beg Bal 1000 $ Return Withdrawal End Bal 21 18.9% -26.8% 25 27 23.2% 23.0% 30 Step 1. Fill in each table. For instance, the "Returnfor Fund #1 for 31 the first year would be -$129.0000 (which is -12.90% of that year's beginning 32 balance.) 33 34 Hint: the Ending Balance on the last row of teach table should be 35 almost identical within a dollar of each other). Key 990901 964 905) 910 969 (8) 919) 9 (10) End

Answer 1

STEP 1
$ return for the year = Return*Beg balance for that year
FUND 1
Return	Year	Beg Balance	$ Return	Withdrawal	Ending balance
-12.90%	1	1000.00	-129.00		871.00
12.90%	2	871.00	112.36		983.36
-18.30%	3	983.36	-179.95		803.40
15.80%	4	803.40	126.94		930.34
15.00%	5	930.34	139.55		1069.89
FUND 2
Return	Year	Beg Balance	$ Return	Withdrawal	Ending balance
-18.90%	1	1000.00	-189.00		811.00
18.90%	2	811.00	153.28		964.28
-26.80%	3	964.28	-258.43		705.85
23.20%	4	705.85	163.76		869.61
23.00%	5	869.61	200.01		1069.62
STEP 3
Ending balance = Beg balance + $return - withdrawal
FUND 1
Return	Year	Beg Balance	$ Return	Withdrawal	Ending balance
-12.90%	1	1000.00	-129.00	149.00	722.00
12.90%	2	722.00	93.14	149.00	666.14
-18.30%	3	666.14	-121.90	149.00	395.23
15.80%	4	395.23	62.45	149.00	308.68
15.00%	5	308.68	46.30	149.00	205.98
FUND 2
Return	Year	Beg Balance	$ Return	Withdrawal	Ending balance
-18.90%	1	1000.00	-189.00	149.00	662.00
18.90%	2	662.00	125.12	149.00	638.12
-26.80%	3	638.12	-171.02	149.00	318.10
23.20%	4	318.10	73.80	149.00	242.90
23.00%	5	242.90	55.87	149.00	149.77
FUND 1's ending balance for year 5			205.98
FUND 2's ending balance for year 5			149.77
Difference			56.21
C. Between 50 and 61.