I need only e) included i; ii; f

S. O a E Mon Jan 27 10:36 PM Q Search in Document Word File Edit View Insert Format OOO SU Home Insert Draw Design Layout 8 Cambria (Hea... 12 AA Paste B1 v . abe X2 x A + Share Tools Table Window Help WE MT S20 (1)DH References Mailings Review View A A 5 E 3+ 4+ c AaBbCcDdEt AaBb CcD A = = = * 8.2 Heading 1 1. You have the following historical information for a mutual fund: AaBbCcDdE Normal AaBbCeDdi AaBb CcDdEe AaBb Strong Subtitle Title AaBbCcDdE No Spacing Emphasis Styles Pane Year 2015 2016 2017 2018 2019 Total Return 6% -10% 12% 17% 9% | Con a. Compute the arithmetic mean return for the fund over the 5 years. b. Compute your ending wealth for 2019 if you had invested $10,000 in the fund at the beginning of 2015. C. Compute the annualized return (geometric mean) for the fund's returns over the 5 years. d. Cite one situation where you would use arithmetic mean and one where you would use annualized return. Explain why the method of calculating average return you chose is appropriate for each case. The standard deviation of the fund is 10.2%. If the US T-bill rate is 2%, and investors' utility functions follow the formula, LOK U = E(r) - Ag2 i. Suppose one investor has a coefficient of risk aversion of A = 2, while another investor has a coefficient of risk aversion of A=6. Calculate the Certainty Equivalent Rates for this fund for each investor. ii. Explain why the Certainty Equivalent Rates are different for the two investors in Part (I). Refer to the meaning of Certainty Equivalent (not just the math of the utility function above) in your explanation. Intel f. The Downside Risk (Lower Partial Standard Deviation) for the fund is 8.4%. Explain how this might change an investor's perception of the riskiness of the fund. Int Finand Page 2 of 8 1627 words English (United States) O Focus B - - + 123% df 4099 OVU 27 . & PAA ON OHV > sw XP