An investor wants to select one of the six mutual funds for the coming year. Data showing the percentage annual return for each fund during five typical one year periods are shown here (hence five states of nature):

Question 9: Assume the investor is conservative, what is the recommended mutual fund? What are the maximum and minimum returns?

Question 10: Suppose we were given the probabilities of 0.2, 0.3, 0.1, 0.1, and 0.3. Using the expected value table what is the recommended mutual fund? What is the expected return?

State of Nature Year A Year B Year C Year D Year E Mutual Fund 38.5 24.0 29.6 11.2 12.1 34.6 25.9 -0.7 51.2 -23.7 Large Cap 22.4 7.4 Mid Cap 4.8 36.9 3.5 Small Cap 48.7 30.6 78.9 34.5 16.7 Health Sector 26.5 41.9 30.1 22.2 Tech Sector 95.4 47.8 38.2