Calculate the average annual return of the Opportunity fund and the S&P 500. Which performed better over this period? If you had invested $1,000 in each in- vestment at the beginning of 2009, how much money would you have in each investment at the end of 2012? Calculate the standard deviation of the Opportu- nity fund's return and those of the S&P 500. Which is more volatile?
Calculate the average annual return of the Opportunity fund and the S&P 500. Which performed better over this period? If you had invested $1,000 in each in- vestment at the beginning of 2009, how much money would you have in each investment at the end of 2012? Calculate the standard deviation of the Opportu- nity fund's return and those of the S&P 500. Which is more volatile?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![In the chapter opener, you learned that Bill Miller's investment performance was
alternating between the very top and the very bottom of his profession. What
aspect of his investment strategy would lead you to expect that his performance
might exhibit greater volatility than that of other mutual funds? The following
table shows the annual performance from 2009 to 2012 of Miller's Opportunity
fund and the S&P 500 index.
Opportunity
Year
2009
2010
2011
2012
S&P 500
Fund Return
76.0%
16.6%
-34.9%
39.6%
Return
26.5%
15.1%
2.11%
16.0%
Calculate the average annual return of the Opportunity fund and the S&P 500.
Which performed better over this period? If you had invested $1,000 in each in-
vestment at the beginning of 2009, how much money would you have in each
investment at the end of 2012? Calculate the standard deviation of the Opportu-
nity fund's return and those of the S&P 500. Which is more volatile?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa17e67b4-bac3-4240-92cf-08dbba93ab32%2F956071ae-3bc0-46dc-8bcf-63c501baf86c%2Fdznscb7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In the chapter opener, you learned that Bill Miller's investment performance was
alternating between the very top and the very bottom of his profession. What
aspect of his investment strategy would lead you to expect that his performance
might exhibit greater volatility than that of other mutual funds? The following
table shows the annual performance from 2009 to 2012 of Miller's Opportunity
fund and the S&P 500 index.
Opportunity
Year
2009
2010
2011
2012
S&P 500
Fund Return
76.0%
16.6%
-34.9%
39.6%
Return
26.5%
15.1%
2.11%
16.0%
Calculate the average annual return of the Opportunity fund and the S&P 500.
Which performed better over this period? If you had invested $1,000 in each in-
vestment at the beginning of 2009, how much money would you have in each
investment at the end of 2012? Calculate the standard deviation of the Opportu-
nity fund's return and those of the S&P 500. Which is more volatile?
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