Using the number of funds as weights, compute the weighted average total return for these mutual funds. (to 2 decimals) 10.23 % 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? (i) Using "number of funds" as weights will only be a good approximation if the amount invested in various funds is approximately equal. The amount investec in each fund could be used for weights. (ii) Using "number of funds" as weights results in a good approximation regardless of the amount invested in various funds. There is no need to use a differen veight. (iii) Using "number of funds" as weights will only be a good approximation if the amount invested in various funds is approximately equal. There is no other ption that could be used for weights. (iv) Using "number of funds" as weights results in a good approximation regardless of the amount invested in various funds. The total amount invested in all Funds could be used for weights. Choose the correct option. Choice (iv) A Suppose you invested $10,000 in this group of mutual funds and diversified the investment by placing $2,000 in Domestic Equity funds, $4,000 in Enternational Equity funds, $3,000 in Specialty Stock funds, and $1,000 in Hybrid funds. What is the expected return on the portfolio? (to 2 decimals)

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 1E: An annuity is a sum of money that is paid in regular equal payments. The __________ of an annuity is...
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Type of Fund
Number of Funds
Total Return (%)
Domestic Equity
9,191
4.65
International Equity
2,621
18.15
Specialty Stock
1,419
11.36
Hybrid
2,900
6.75
Transcribed Image Text:Type of Fund Number of Funds Total Return (%) Domestic Equity 9,191 4.65 International Equity 2,621 18.15 Specialty Stock 1,419 11.36 Hybrid 2,900 6.75
Using the number of funds as weights, compute the weighted average total return for these mutual funds. (to 2 decimals)
10.23 %
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?
(i) Using "number of funds" as weights will only be a good approximation if the amount invested in various funds is approximately equal. The amount invested
in each fund could be used for weights.
(ii) Using "number of funds" as weights results in a good approximation regardless of the amount invested in various funds. There is no need to use a different
weight.
(iii) Using "number of funds" as weights will only be a good approximation if the amount invested in various funds is approximately equal. There is no other
option that could be used for weights.
(iv) Using "number of funds" as weights results in a good approximation regardless of the amount invested in various funds. The total amount invested in all
funds could be used for weights.
Choose the correct option.
Choice (iv)
Suppose you invested $10,000 in this group of mutual funds and diversified the investment by placing $2,000 in Domestic Equity funds, $4,000 in
International Equity funds, $3,000 in Specialty Stock funds, and $1,000 in Hybrid funds. What is the expected return on the portfolio? (to 2 decimals)
Transcribed Image Text:Using the number of funds as weights, compute the weighted average total return for these mutual funds. (to 2 decimals) 10.23 % 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? (i) Using "number of funds" as weights will only be a good approximation if the amount invested in various funds is approximately equal. The amount invested in each fund could be used for weights. (ii) Using "number of funds" as weights results in a good approximation regardless of the amount invested in various funds. There is no need to use a different weight. (iii) Using "number of funds" as weights will only be a good approximation if the amount invested in various funds is approximately equal. There is no other option that could be used for weights. (iv) Using "number of funds" as weights results in a good approximation regardless of the amount invested in various funds. The total amount invested in all funds could be used for weights. Choose the correct option. Choice (iv) Suppose you invested $10,000 in this group of mutual funds and diversified the investment by placing $2,000 in Domestic Equity funds, $4,000 in International Equity funds, $3,000 in Specialty Stock funds, and $1,000 in Hybrid funds. What is the expected return on the portfolio? (to 2 decimals)
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