The following table shows the total return and the number of funds forfour categories of mutual funds. Type of Fund Number of Funds Total Return (%) Domestic EquityInternational Equity Specialty StockHybrid 9191262114192900 1.6518.1511.366.75 a. Using the number of funds as weights, compute the weightedaverage total return for these mutual funds.b. Is there any difficulty associated with using the "number offunds" as the weights in computing the weighted average totalreturn in part (a)? Discuss. What else might be used for weights? c. Suppose you invested $10,000 in this group of mutual funds anddiversified the investment by placing $2000 in Domestic Equityfunds, $4000 in International Equity funds, $3000 in Specialty Stockfunds, and $1000 in Hybrid funds. What is the expected return onthe portfolio?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
The following table shows the total return and the number of funds for
four categories of mutual funds.
| Type of Fund | Number of Funds | Total Return (%) |
| Domestic Equity International Equity Specialty Stock Hybrid |
9191 2621 1419 2900 |
1.65 18.15 11.36 6.75 |
a. Using the number of funds as weights, compute the weighted
average total return for these mutual funds.
b. Is there any difficulty associated with using the "number of
funds" as the weights in computing the weighted average total
return in part (a)? Discuss. What else might be used for weights?
c. Suppose you invested $10,000 in this group of mutual funds and
diversified the investment by placing $2000 in Domestic Equity
funds, $4000 in International Equity funds, $3000 in Specialty Stock
funds, and $1000 in Hybrid funds. What is the expected return on
the portfolio?
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