Choose arbitrarily one bond fund, one Canadian equity fund, and one international fund that have at least five years of data. Obtain the data necessary to calculate the monthly rate of return for the past five years. Use EXCEL to calculate the average rates of return, the standard deviation, and correlation coefficients between the three funds. Construct three portfolios from these mutual funds. For each portfolio, calculate the expected rate of return and the standard deviation. Comment on the relative strengths and weaknesses of the portfolios, identifying which you would prefer to invest in.

The marking guidelines are as follows:

(2 Marks) Monthly rates of return over the last 5 years of three funds (Bond, Canadian Equity, International).

(2 Marks) Average rates of return, standard deviations, and correlation coefficients between the above funds.

(2 Marks) Portfolio creation Expected rate of return.

(2 Marks) Portfolio creation Standard Deviation.

(1 Mark) Overall written report and presentation (Introduction, Conclusion, Graphs, Charts, Tables).

An excellent source of the data needed to complete the assignment is the Morningstar website that compiles detailed date on a vast array of available investments (see sample attachment). You can access this at

Morningstar.ca

funds

tools - fund finder

Access the appropriate funds

performance - monthly

I have randomly accessed funds from this database in my EXCEL analysis.