2. Over the last 10 years four mutual funds all had the same mean rate of return, 12%. The mutual funds had different standard deviations as follows: Mutual Money 8%, Co-joined Investments 6%, Together Fund 4%, All-One Fund 9%. Is there one fund that is the most consistent in rate of return? In other words, is there one fund that shows the smallest amount of variation in its rate of return? Explain.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter13: Investing In Mutual Funds, Etfs, And Real Estate
Section: Chapter Questions
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2. Over the last 10 years four mutual funds all had the same mean rate of return, 12%. The mutual
funds had different standard deviations as follows: Mutual Money 8%, Co-joined Investments 6%,
Together Fund 4%, All-One Fund 9%. Is there one fund that is the most consistent in rate of return? In
other words, is there one fund that shows the smallest amount of variation in its rate of return? Explain.
Transcribed Image Text:2. Over the last 10 years four mutual funds all had the same mean rate of return, 12%. The mutual funds had different standard deviations as follows: Mutual Money 8%, Co-joined Investments 6%, Together Fund 4%, All-One Fund 9%. Is there one fund that is the most consistent in rate of return? In other words, is there one fund that shows the smallest amount of variation in its rate of return? Explain.
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