6. The exercise in Excel file gives data for three mutual funds. a. Pt Discrete return (percentage returns) is defined as rt = 1 and
6. The exercise in Excel file gives data for three mutual funds. a. Pt Discrete return (percentage returns) is defined as rt = 1 and compounded Pt1 Pt . Then, Rt = Ln(1 + rt) and rt = return (log return) is defined as Rt = Ln exp(Rt) 1. Based on the above definition, prove the following equation. T 1 r2 Rt t=1 Compute the discrete annual returns for each fund. Use an array function to compute the compounded annual return over the period. Use Sum function to Pt1 exp = [(1 + r1)(1 + r2) (1 + r,)]% calculate compounded annual return based on EXP [2le Rt] 1. Use Product function to calculate compounded annual return based on [(1 + r1)(1 + r2) (1 + r0]; 1. What's the compounded annual return for Fidelity Diversified international, Vanguard, Index 500, and Vanguard High-Yield CorporatePAttach examples of Excel formulas based on both methods. A B C D E F G H K L Fidelity Fidelity Vanguard Diversified Vanguard Diversified Vanguard High-Yield Intemation Vanguard High-Yield Date International Index 500 Corporate Date al Index 500 Corporate Percentage return 1/2/01 16.70 101.82 2.87 1/2/02
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