Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:In a recent 5-year period, mutual fund manager Diana Sauros produced the following percentage rates of return for the Mesozoic
Fund. Rates of return on the market index are given for comparison.
Fund
Market index
a.
1
-1.2
-0.9
b.
2
+24.8
+16.0
a. Calculate (a) the average return on both the Fund and the index, and (b) the standard deviation of the returns on each. (Do not
round intermediate calculations. Round your answers to 2 decimal places.)
b. Did Ms. Sauros do better or worse than the market index on these measures?
Average return
Standard deviation
Did Ms. Sauros do better or worse than
the market index on these measures?
3
+40.7
+31.7
Mesozoic
Fund Return
Better
4
+11.1
+10.9
15.06
16.04
Market
Portfolio
Return
5
+0.3
-0.7
10.70
11.76
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