WindyRoad is an investment company that has two mutual funds. The WindyRoad Dull Fund invests in boring corporate bonds and its Lively Fund invests in high-risk, high- return companies. The returns for the two funds in the 5-year period 20012005 are given below.

a. Suppose you had invested $100 in each of the two funds at the beginning of 2001.How much would you have at the end of 2005? (Answers: $132.44, $118.13)

b. What was the EAIR paid by each of the funds over the 5-year period 20012005? (Answers: 3.93%, 1.16%)

c. Is there a conclusion you can draw from this example?

Please show how to do it in Excel and the formulas used.

Please show how to do it in Excel and the formulas used.

DULL FUND OR LIVELY FUND? Dull Fund return Lively Fund Year 2001 2002 2003 2004 2005 return 9.20% 5.20% 4.30% 3.30% 7.00% 11 .50% -14.50% -23.40% 42.40% 13.60% 3 4 7 8 9 Average return 5.80% 5.92%