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The table below shows the annual return of ARK Innovation ETF (ARKK) [1] and the S&P500 stock index for the period of 2019-2022. Year
The table below shows the annual return of ARK Innovation ETF (ARKK) [1] and the S&P500 stock index for the period of 2019-2022. Year 2019 2020 2021 2022 Arithmetic average Geometric average Standard deviation Correlation coefficient Annual Percentage Change ARKK 35.2% 152.5% -23.4% -67.0% (a) -3.6% (c) 0.45 S&P 500 34.5% 18.4% 28.7% -18.1% 27.2% (b) 23.6% a.) Calculate the values for cell (a), (b), and (c). Show your steps below. b.) An investor has $100,000 at the end of year 2019. She invests $60,000 in ARKK and the rest is invested in the S&P500 ETF fund. What is the standard deviation of her portfolio? c.) Continue from part b) - based on the given information, if you have to guess what the return of her portfolio will be in 2023, what is your best guess? Explain your answer.
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Answer a We add the annual returns for ARKK and the SP 500 and divide by the number of years 4 to arrive at the arithmetic average ARKK 352 1525 234 670 4 243 SP 500 345 184 287 181 4 159 As a result ...Get Instant Access to Expert-Tailored Solutions
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