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Fund BIOTECH with the following performance: Down 50% in Year 1, Up 60% in Year 2. Average arithmetic return is 5% per year with higher
Fund BIOTECH with the following performance: Down 50% in Year 1, Up 60% in Year 2. Average arithmetic return is 5% per year with higher than average volatility that is expected to persist in the future. Fund UTILITIES with the following performance: Down 1% in Year 1, Up 2% in Year 2. Average return is 0.5% with lower than average volatility that is expected to persist in the future. Based on your analysis of the two funds' performance and riskiness, which fund would you select and why?
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