You are trying to sell a mutual fund to a customer, who can tolerate losing more than 10% of assets during a bad year if that happened only once every twenty years. If the expected annual return of the fund you are selling is 8% and the daily volatility is 0.72%, explain briefly how likely is it that the customer would buy the fund. Assume that there are 255 trading days in a year.
You are trying to sell a mutual fund to a customer, who can tolerate losing more than 10% of assets during a bad year if that happened only once every twenty years. If the expected annual return of the fund you are selling is 8% and the daily volatility is 0.72%, explain briefly how likely is it that the customer would buy the fund. Assume that there are 255 trading days in a year.
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter2: Descriptive Statistics
Section: Chapter Questions
Problem 17P: Suppose that you initially invested 10,000 in the Stivers mutual fund and 5,000 in the Trippi mutual...
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You are trying to sell a mutual fund to a customer, who can tolerate losing more than 10% of assets during a bad year if that happened only once every twenty years. If the expected annual return of the fund you are selling is 8% and the daily volatility is 0.72%, explain briefly how likely is it that the customer would buy the fund. Assume that there are 255 trading days in a year.
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