Index funds are mutual funds that try to mimic the movement of leading maket indexes, such as the S&P $500$ or the Pussel $2000.$ Direxion Funds is a leading provider of

leveraged index and ofter altemative$-$dass mutual fand products for investment advisors and sophisficated imvestors Two of the company's funds are shown in the table

below. Complete $($a$)$ through $($d$)$ below.

a$.$ The objective of the Direxion Funds Bul $2$ Fund, SPUU, is $200\%$ of the performance of the SSP $500$ Index. What are the values of ${}_0$ and ${}_1$ that form the approximate

market model for SPUU?

$($$ weekly change in SPUU$)$ weekly change in SAP $500$ Index$)$

$b_0=$ and $b_1=$

$($Type integers or decimals. Do not round.$)$

b$.$ If the SSP $500$ Index gains $15\%$ in a year, what retum do you expect SPUU to have? Select the correct cholice below and fill in the answer box to complete your choice.

A$.$ If the S&P $500$ Index gains $15\%$ in a year, SPUU is expected to gain an estimated

k$.$

B$.$ If the S$8$P $500$ index gains $15\%$ in a year, SPUU is expected to lose an estimated

$\%.$

c$.$ If the S$P $500$ index loses $45\%$ in a certain year, what return do you expect SPUU to have? Select the correct choice below and fll in the answer box to complete your

choice.

A$.$ If the S$8$P $500$ Index loses $45\%$ in a year, SPUU is expected to gain an estimated $16.$

B$.$ If the S$8$P $500$ Index loses $45\%$ in a year, SPUU is expected to lose an estimated ib$.$

d$.$ What type of investors should be attracted to leveraged index funds? What type of investors should stay away from these funds?

A$.$ Risk takers will be affracted to these funds, and rlsk$-$averse investors wil stay away.

B$.$ Risk$-$averse investors wil be attracted to these funds, and risk takers will stay away.

C$.$ All imestors will stay away from these funds.

D$.$ All imvestors will be attracted to these funds.