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 11: What is the EMV for the fund in part A? How much of an increase can be obtained by following the recommendation of part B?

Question 12: Which of the two funds appears to have more EOL? Is the increase in EOL worth the potential increase in gain? Explain.

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 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