Part one and Part two must be done on Excel

Part One

Select five no-load mutual funds, each with a different objective. Do not use money market or tax-exempt funds. A mutual fund can specify whatever objective its management wishes, and the fund can use its own terminology. You will encounter many objectives other than those listed in this book. Common examples are balanced, growth and income, small company growth, BBB-rated bond, precious metal, and international. Just make sure you select five funds with different objectives.

Also ensure that each fund you select has ten years of annual performance data available in the Investment Company Yearbook. Most library reference rooms subscribe to this well-known service. Alternatively, you can obtain historical mutual fund and stock index information via the historical prices option at http://quote.yahoo.com.

A Prepare a single table showing the following for each of your five funds: [TABLE 1]

1. Fund name.

2. Annual total return statistics for the past ten years. Mutual fundsmust distribute a portion of their income and capital gains each year,

so it is inaccurate to look only at changes in net asset value.

3. Arithmetic average of annual total returns.

4. Geometric average of annual total returns.

5. Standard deviation of annual total returns.

6. The current value of $1,000 invested ten years ago, assuming alldistributions were reinvested.

B Prepare a covariance matrix of the five funds. [TABLE 2]

C Prepare a correlation matrix of the five funds. [TABLE 3]

D Obtain a prospectus on each of your funds. Prepare a table showing thefive largest holdings of each of your funds. You should specifically ask for this information, because some mutual fund prospectuses do not provide it. Show the stock ticker symbols. [TABLE 4]

Part Two

1. Problem 1: Using end-of-the-year Treasury bill rates and the S&P 500 index, estimate the beta of each of your funds.24

2. Problem 2: Repeat Problem 1 using the Dow Jones Industrial Average instead of the S&P 500 index.

3. Show the T-bill rates and index levels in tabular form. [TABLE 5]