{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lesson #6, Assignment #2 - Chapter 12 A Job at S&S Air...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 12 A Job at S&S Air Input area: 10-year annual return Standard deviation Bledsoe S&P 500 Index Fund 11.48% 15.82% Bledsoe Small-Cap Fund 16.68% 19.64% Bledsoe Large Company Stock Fund 11.85% 15.41% Bledsoe Bond Fund 9.67% 10.83% Company stock expected return 18.00% Company stock standard deviation 70.00% Question 1: What advantages do the mutual funds offer compared to company stock? Question 5: Risk-free rate The biggest advantage the mutual funds have is instant diversification. The mutual funds have a number of assets in the portfolio. Question 2: Assume that you invest 5% of your salary and receive the full 5% match from S&S Air. What EAR do you earn from the match? What conclusions do you draw about matching plans? Both the APR and EAR are infinite. The match is instantaneous, so the number of periods in a year is infinite. Question 3: Assume you decide you should invest at least part of your money in large-capitalization stocks of companies based in the United States. What are the advantages and disadvantages of choosing the Bledsoe Large-Company Stock Fund compared to the Bledsoe S&P 500 Index Fund?
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern