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Month index Month S&P 500 T-Bill 1 Jan-1990 0.85% 0.64% 2 Feb-1990 2.43% 0.65% 3 Mar-1990 -2.69% 0.67% 4 Apr-1990 9.20% 0.67% 5 May-1990 -0.89%

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Month index Month S&P 500 T-Bill
1 Jan-1990 0.85% 0.64%
2 Feb-1990 2.43% 0.65%
3 Mar-1990 -2.69% 0.67%
4 Apr-1990 9.20% 0.67%
5 May-1990 -0.89% 0.67%
6 Jun-1990 -0.52% 0.65%
7 Jul-1990 -9.43% 0.64%
8 Aug-1990 -5.12% 0.63%
9 Sep-1990 -0.67% 0.62%
10 Oct-1990 5.99% 0.61%
11 Nov-1990 2.48% 0.59%
12 Dec-1990 4.15% 0.57%
13 Jan-1991 6.73% 0.54%
14 Feb-1991 2.22% 0.51%
15 Mar-1991 0.03% 0.52%
16 Apr-1991 3.86% 0.51%
17 May-1991 -4.79% 0.50%
18 Jun-1991 4.49% 0.52%
19 Jul-1991 1.96% 0.51%
20 Aug-1991 -1.91% 0.47%
21 Sep-1991 1.18% 0.45%
22 Oct-1991 -4.39% 0.43%
23 Nov-1991 11.16% 0.40%
24 Dec-1991 -1.99% 0.36%
25 Jan-1992 0.96% 0.34%
26 Feb-1992 -2.18% 0.35%
27 Mar-1992 2.79% 0.38%
28 Apr-1992 0.10% 0.35%
29 May-1992 -1.74% 0.34%
30 Jun-1992 3.94% 0.34%
31 Jul-1992 -2.40% 0.30%
32 Aug-1992 0.91% 0.28%
33 Sep-1992 0.21% 0.26%
34 Oct-1992 3.03% 0.27%
35 Nov-1992 1.01% 0.30%
36 Dec-1992 0.70% 0.30%
37 Jan-1993 1.05% 0.29%
38 Feb-1993 1.87% 0.28%
39 Mar-1993 -2.54% 0.27%
40 Apr-1993 2.27% 0.27%
41 May-1993 0.08% 0.28%
42 Jun-1993 -0.53% 0.29%
43 Jul-1993 3.44% 0.28%
44 Aug-1993 -1.00% 0.28%
45 Sep-1993 1.94% 0.28%
46 Oct-1993 -1.29% 0.28%
47 Nov-1993 1.01% 0.29%
48 Dec-1993 3.25% 0.30%
49 Jan-1994 -3.00% 0.29%
50 Feb-1994 -4.57% 0.32%
51 Mar-1994 1.15% 0.35%
52 Apr-1994 1.24% 0.39%
53 May-1994 -2.68% 0.43%
54 Jun-1994 3.15% 0.43%
55 Jul-1994 3.76% 0.45%
56 Aug-1994 -2.69% 0.45%
57 Sep-1994 2.08% 0.47%
58 Oct-1994 -3.95% 0.50%
59 Nov-1994 1.23% 0.53%
60 Dec-1994 2.43% 0.58%
61 Jan-1995 3.61% 0.57%
62 Feb-1995 2.73% 0.54%
63 Mar-1995 2.80% 0.52%
64 Apr-1995 3.63% 0.51%
65 May-1995 2.13% 0.49%
66 Jun-1995 3.18% 0.46%
67 Jul-1995 -0.03% 0.45%
68 Aug-1995 4.01% 0.47%
69 Sep-1995 -0.50% 0.46%
70 Oct-1995 4.10% 0.45%
71 Nov-1995 1.74% 0.44%
72 Dec-1995 3.26% 0.43%
73 Jan-1996 0.69% 0.41%
74 Feb-1996 0.79% 0.40%
75 Mar-1996 1.34% 0.43%
76 Apr-1996 2.29% 0.45%
77 May-1996 0.23% 0.46%
78 Jun-1996 -4.57% 0.47%
79 Jul-1996 1.88% 0.47%
80 Aug-1996 5.42% 0.46%
81 Sep-1996 2.61% 0.47%
82 Oct-1996 7.34% 0.45%
83 Nov-1996 -2.15% 0.44%
84 Dec-1996 6.13% 0.44%
85 Jan-1997 0.59% 0.46%
86 Feb-1997 -4.26% 0.45%
87 Mar-1997 5.84% 0.47%
88 Apr-1997 5.86% 0.49%
89 May-1997 4.35% 0.48%
90 Jun-1997 7.81% 0.46%
91 Jul-1997 -5.75% 0.45%
92 Aug-1997 5.32% 0.45%
93 Sep-1997 -3.45% 0.45%
94 Oct-1997 4.46% 0.44%
95 Nov-1997 1.57% 0.44%
96 Dec-1997 1.02% 0.45%
97 Jan-1998 7.04% 0.43%
98 Feb-1998 4.99% 0.43%
99 Mar-1998 0.91% 0.44%
100 Apr-1998 -1.88% 0.44%
101 May-1998 3.94% 0.44%
102 Jun-1998 -1.16% 0.44%
103 Jul-1998 -14.58% 0.44%
104 Aug-1998 6.24% 0.42%
105 Sep-1998 8.03% 0.38%
106 Oct-1998 5.91% 0.34%
107 Nov-1998 5.64% 0.37%
108 Dec-1998 4.10% 0.37%
109 Jan-1999 -3.23% 0.37%
110 Feb-1999 3.88% 0.38%
111 Mar-1999 3.79% 0.39%
112 Apr-1999 -2.50% 0.38%
113 May-1999 5.44% 0.40%
114 Jun-1999 -3.20% 0.42%
115 Jul-1999 -0.63% 0.41%
116 Aug-1999 -2.86% 0.42%
117 Sep-1999 6.25% 0.43%
118 Oct-1999 1.91% 0.44%
119 Nov-1999 5.78% 0.45%
120 Dec-1999 -5.09% 0.47%
121 Jan-2000 -2.01% 0.50%
122 Feb-2000 9.67% 0.50%
123 Mar-2000 -3.08% 0.50%
124 Apr-2000 -2.19% 0.50%
125 May-2000 2.39% 0.51%
126 Jun-2000 -1.63% 0.50%
127 Jul-2000 6.07% 0.49%
128 Aug-2000 -5.35% 0.50%
129 Sep-2000 -0.49% 0.50%
130 Oct-2000 -8.01% 0.49%
131 Nov-2000 0.41% 0.49%
132 Dec-2000 3.46% 0.46%
133 Jan-2001 -9.23% 0.39%
134 Feb-2001 -6.42% 0.38%
135 Mar-2001 7.68% 0.35%
136 Apr-2001 0.51% 0.33%
137 May-2001 -2.50% 0.31%
138 Jun-2001 -1.07% 0.29%
139 Jul-2001 -6.41% 0.30%
140 Aug-2001 -8.17% 0.28%
141 Sep-2001 1.81% 0.23%
142 Oct-2001 7.52% 0.19%
143 Nov-2001 0.76% 0.18%
144 Dec-2001 -1.56% 0.18%
145 Jan-2002 -2.08% 0.18%
146 Feb-2002 3.67% 0.18%
147 Mar-2002 -6.14% 0.21%
148 Apr-2002 -0.91% 0.20%
149 May-2002 -7.25% 0.19%
150 Jun-2002 -7.90% 0.18%
151 Jul-2002 0.49% 0.16%
152 Aug-2002 -11.00% 0.15%
153 Sep-2002 8.64% 0.14%
154 Oct-2002 5.71% 0.14%
155 Nov-2002 -6.03% 0.12%
156 Dec-2002 -2.74% 0.12%
157 Jan-2003 -1.70% 0.11%
158 Feb-2003 0.84% 0.11%
159 Mar-2003 8.10% 0.10%
160 Apr-2003 5.09% 0.11%
161 May-2003 1.13% 0.10%
162 Jun-2003 1.62% 0.08%
163 Jul-2003 1.79% 0.09%
164 Aug-2003 -1.19% 0.11%
165 Sep-2003 5.50% 0.10%
166 Oct-2003 0.71% 0.10%
167 Nov-2003 5.08% 0.11%
168 Dec-2003 1.73% 0.11%
169 Jan-2004 1.22% 0.10%
170 Feb-2004 -1.64% 0.10%
171 Mar-2004 -1.68% 0.10%
172 Apr-2004 1.21% 0.12%
173 May-2004 1.80% 0.15%
174 Jun-2004 -3.43% 0.17%
175 Jul-2004 0.23% 0.17%
176 Aug-2004 0.94% 0.17%
177 Sep-2004 1.40% 0.17%
178 Oct-2004 3.86% 0.18%
179 Nov-2004 3.25% 0.21%
180 Dec-2004 -2.53% 0.22%
181 Jan-2005 1.89% 0.24%
182 Feb-2005 -1.91% 0.25%
183 Mar-2005 -2.01% 0.27%
184 Apr-2005 3.00% 0.27%
185 May-2005 -0.01% 0.27%
186 Jun-2005 3.60% 0.28%
187 Jul-2005 -1.12% 0.30%
188 Aug-2005 0.69% 0.32%
189 Sep-2005 -1.77% 0.32%
190 Oct-2005 3.52% 0.34%
191 Nov-2005 -0.10% 0.35%
192 Dec-2005 2.55% 0.36%
193 Jan-2006 0.05% 0.36%
194 Feb-2006 1.11% 0.38%
195 Mar-2006 1.22% 0.39%
196 Apr-2006 -3.09% 0.40%
197 May-2006 0.01% 0.41%
198 Jun-2006 0.51% 0.42%
199 Jul-2006 2.13% 0.42%
200 Aug-2006 2.46% 0.41%
201 Sep-2006 3.15% 0.41%
202 Oct-2006 1.65% 0.41%
203 Nov-2006 1.26% 0.41%
204 Dec-2006 1.41% 0.40%
205 Jan-2007 -2.18% 0.41%
206 Feb-2007 1.00% 0.41%
207 Mar-2007 4.33% 0.40%
208 Apr-2007 3.25% 0.40%
209 May-2007 -1.78% 0.40%
210 Jun-2007 -3.20% 0.40%
211 Jul-2007 1.29% 0.40%
212 Aug-2007 3.58% 0.37%
213 Sep-2007 1.48% 0.34%
214 Oct-2007 -4.40% 0.34%
215 Nov-2007 -0.86% 0.29%
216 Dec-2007 -6.12% 0.27%
217 Jan-2008 -3.48% 0.22%
218 Feb-2008 -0.60% 0.17%
219 Mar-2008 4.75% 0.13%
220 Apr-2008 1.07% 0.14%
221 May-2008 -8.60% 0.17%
222 Jun-2008 -0.99% 0.20%
223 Jul-2008 1.22% 0.19%
224 Aug-2008 -9.08% 0.18%
225 Sep-2008 -16.94% 0.16%
226 Oct-2008 -7.48% 0.12%
227 Nov-2008 0.78% 0.09%
228 Dec-2008 -8.57% 0.04%
229 Jan-2009 -10.99% 0.04%
230 Feb-2009 8.54% 0.05%
231 Mar-2009 9.39% 0.05%
232 Apr-2009 5.31% 0.05%
233 May-2009 0.02% 0.04%
234 Jun-2009 7.41% 0.04%
235 Jul-2009 3.36% 0.04%
236 Aug-2009 3.57% 0.04%
237 Sep-2009 -1.98% 0.03%
238 Oct-2009 5.74% 0.03%
239 Nov-2009 1.78% 0.03%
240 Dec-2009 -3.70% 0.03%
241 Jan-2010 2.85% 0.03%
242 Feb-2010 5.88% 0.03%
243 Mar-2010 1.48% 0.03%
244 Apr-2010 -8.20% 0.04%
245 May-2010 -5.39% 0.03%
246 Jun-2010 6.88% 0.03%
247 Jul-2010 -4.74% 0.02%
248 Aug-2010 8.76% 0.02%
249 Sep-2010 3.69% 0.02%
250 Oct-2010 -0.23% 0.02%
251 Nov-2010 6.53% 0.02%
252 Dec-2010 2.26% 0.02%
253 Jan-2011 3.20% 0.02%
254 Feb-2011 -0.10% 0.02%
255 Mar-2011 2.85% 0.02%
256 Apr-2011 -1.35% 0.02%
257 May-2011 -1.83% 0.02%
258 Jun-2011 -2.15% 0.01%
259 Jul-2011 -5.68% 0.02%
260 Aug-2011 -7.18% 0.01%
261 Sep-2011 10.77% 0.01%
262 Oct-2011 -0.51% 0.01%
263 Nov-2011 0.85% 0.01%
264 Dec-2011 4.36% 0.01%
265 Jan-2012 4.06% 0.01%
266 Feb-2012 3.13% 0.01%
267 Mar-2012 -0.75% 0.02%
268 Apr-2012 -6.27% 0.01%
269 May-2012 3.96% 0.02%
270 Jun-2012 1.26% 0.02%
271 Jul-2012 1.98% 0.02%
272 Aug-2012 2.42% 0.01%
273 Sep-2012 -1.98% 0.01%
274 Oct-2012 0.28% 0.01%
275 Nov-2012 0.71% 0.01%
276 Dec-2012 5.04% 0.01%
277 Jan-2013 1.11% 0.01%
278 Feb-2013 3.60% 0.01%
279 Mar-2013 1.81% 0.01%
280 Apr-2013 2.08% 0.01%
281 May-2013 -1.50% 0.01%
282 Jun-2013 4.95% 0.01%
283 Jul-2013 -3.13% 0.01%
284 Aug-2013 2.97% 0.01%
285 Sep-2013 4.46% 0.01%
286 Oct-2013 2.80% 0.01%
287 Nov-2013 2.36% 0.01%
288 Dec-2013 -3.56% 0.01%
CAS E 1.I COLLEGE FUND INVESTMENT Questions I. The file CIl_ol.xlsx contains monthly returns our next-door neighbor, Scott Jansen, has a 12-year-old daughter, and he intends to pay the tuition for her first year of college six years from now. The tuition for the first year will be $20,000. Scott has gone through his budget and finds that he can invest $300 per month for the next six years. Scott has opened accounts at two mutual funds. The first fund follows an investment strategy designed to match the return of the S&P 500. The second fund invests in short-term (one-year) Treasury bills. Both funds have very low fees. of the S&P 500 and Treasury bills from January 1990 through December 2013. Suppose that in each of the next 72 months (six years), it is equally likely that any of the historical returns will occur. Develop a spreadsheet model to simulate the two suggested investment strate- gies o each strategy over time for a single iteration of the simulation. strategy after six years? Do either of the strate- gies reach the target! ver the six-year period. Plot the value of What is the total value of each Scott has decided to follow a strategy in which he contributes a fixed fraction of the $300 to each fund. An adviser from the first fund suggested that in each month he should invest 80% of the $300 in the S&P 500 fund and the other 20% in the T-bill fund The adviser explained that the S&P 500 has averaged much larger returns than the T-bill fund. Even though stock returns are risky investments in the short run, the risk should be fairly minimal over the longer six-year period. An adviser from the second fund 2. Use @RISK to simulate 1000 iterations of the two strategies over the six-year period. Create a histogram of the final fun your simulation results, which of the two strate- gies would you recommen d values. Based on d? Why? 3. Suppose that Scott needs to have $30,000 to pay for the first year's tuition. Based on the same simulation results, which of the two strate- gies would you recommend now? Why? rec ommended just the opposite: invest 20% in the S&P 500 fund and 80% in T-bills, because treasury bills are backed by the United States government. If you follow this allocation, he said, your average re- turn will be lower, but at least you will have enough to reach your $20,000 target in six years. 4. What other real-world factors might be impor tant to consider in designing the simulation and making a recommendation

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