9:03 year 11 2 3 14 5 16 7 113.7 Fund-1 Fund-2 Fund-3 Fund-4 Hybrid Fund: Includes small Large Large Both cap cap cap stocks stock Bond stock and S&P index und fund fund bonds 28.39 46.44 3.72 30.26 10.77 8.75 15.82 1.6 6.01 3.06 3.15 -3.39 6.37 3.23 13.64 16.82 -0.96 14.1 7.93 3.33 -1.73 -0.08 -0.74 6.7 -37.89 -34.08 -5.57-34.79 -10.53 22.52 23.46 3.43 15.29 12.08 12.93 25.3 4.11 13.82 9.22 -0.09 -5.5 4.9 3.23 3.77 18.04 5.96 19.12 2003 2004 2005 2006 2007 2008 2009 2010 8 2011 9 10 2012 12.5 6.54 Standard 2 Problem 1 Dev Problem 2 Baseline Problem 3: For each scenario explain, based on the data above and risk parameters assessment (STD deviation and beta) which funds would you recommend and explain why? 40 points a. Jack would like to make on average 8% return but is uncomfortable with major drops. Any drop over 15 % in one year makes him nervous b. Jill is very nervous investor and even a 10% drop makes her very uncomfortable. c. Jane is young and comfortable riding the market over next 30 years