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18 Consider three stock funds, which we will call Stock Funds 1, 2, and 3. Suppose that Stock Fund 1 has a mean yearly
18 Consider three stock funds, which we will call Stock Funds 1, 2, and 3. Suppose that Stock Fund 1 has a mean yearly return of 11.70 percent with a standard deviation of 15.50 percent; Stock Fund 2 has a mean yearly return of 11.50 percent with a standard deviation of 17.90 percent, and Stock Fund 3 has a mean yearly return of 25.70 percent with a standard deviation of 7.00 percent. (a) For each fund, find an interval in which you would expect 95.44 percent of all yearly returns to fall. Assume returns are normally distributed. (Round your answers to 2 decimal places. Negative amounts should be indicated by a minus sign.) 01.10.08 Fund 1:1 Fund 2 Fund 3 (b) Using the intervals you computed in part a, compare the three funds with respect to average yearly returns and with respect to variability of returns. Fund 1 has the average retum and the variability Fund 2 has the Fund 3 has the average retum and the variability average retum and the variability (c) Calculate the coefficient of variation for each fund, and use your results to compare the funds with respect to risk. Which fund is riskiest? (Round your answers to 2 decimal places.) Fund 1: Coefficient of Variation Fund 2: Coefficient of Variation- Fund 3: Coefficient of Variation % (c) Calculate the coefficient of variation for each fund, and use your results to compare the funds with respect to risk. Which fund is riskiest? (Round your answers to 2 decimal places.) Fund 1: Coefficient of Variation Fund 2 Coefficient of Variation % Fund 3: Coefficient of Variation % Fund 1 s Fund 2 is and Fund 3 is
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