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14 Dec 2023, 03:09
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If today an investor invests $10,000 in Edward I and the fund’s portfolio gains 10% over the next year, then in one year the value of the investor’s assets in the fund will be $10,850.: Inferable
If three years ago an investor invested a certain amount in Charles II, then the current value of his assets is greater than it would be if he had invested the same amount in William.: Not Inferable
The range of 10-Year Average Annual Returns is greater for Mid-Cap funds than for LargeCap funds.: Not Inferable
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Data Insights (DI) Butler 2023-24 [Question #153, Date: Dec-12-2023] [Click here for Details]
The table shows all the mutual funds in a fund family. Each fund invests in a combination of assets, such as stocks and bonds, according to the fund’s investment philosophy. Each fund’s total return for a given year shows the total performance of the assets in the fund’s portfolio during that year, minus the fund’s expenses. A fund’s expenses are reflected in the fund’s Expense Ratio. So, if a fund’s portfolio gained 5.00% in one year and the fund’s expense ratio was 1.00%, then the fund’s total return for the year was 4.00%. In the table, the 1-Year, 3-Year, 5-Year, and 10-Year columns show each fund’s average annual total returns over the corresponding number of years. This average does not imply the same return for every year in that span.
Average Annual Return (%) | ||||||
| Mutual Fund | Category | Expense Ratio (%) | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|---|---|
| Charles I | Large-Cap Value | 1.5 | 04.28 | 18.74 | 01.01 | 04.36 |
| Charles II | Large-Cap Value | 1.2 | 03.57 | 13.61 | -0.19% | 02.39 |
| Edward I | Large-Cap Blend | 1.5 | 04.13 | 16.72 | -1.03% | 04.44 |
| Edward II | Large-Cap Blend | 1.75 | 03.66 | 18.13 | 02.07 | 05.36 |
| Elizabeth | Municipal Bond | 0.75 | 11.92 | 06.13 | 04.62 | 03.94 |
| Henry III | Mid-Cap Blend | 1.5 | 0.37 | 21.14 | 01.76 | 03.68 |
| Henry IV | Mid-Cap Blend | 1.4 | 02.2 | 17.71 | 02.03 | N/A |
| Henry V | Mid-Cap Growth | 1.75 | 06.39 | 23.39 | 06.41 | 07.37 |
| Henry VI | Mid-Cap Growth | 1.8 | 03.11 | 16.12 | 05.13 | 05.88 |
| James I | Commodities | 1.4 | 04.58 | 21.2 | -3.13% | 09.39 |
| James II | International | 1.9 | -02.86 | 19.97 | 0.28 | N/A |
| Richard I | Large-Cap Growth | 1.2 | 14.13 | 29.06 | 04.48 | 06.13 |
| Richard II | Large-Cap Growth | 1.5 | 12.09 | 22.74 | 05.31 | 06.47 |
| Victoria | Municipal Bond | 0.9 | 08.13 | 03.89 | 04.17 | 03.65 |
| William | Taxable Bond | 1.65 | 09.47 | 13.73 | 08.27 | N/A |
For each of the following statements, select Inferable if the statement is reasonably inferable from the given information. Otherwise, select Not inferable.
| Inferable | Not Inferable | |
| If today an investor invests $10,000 in Edward I and the fund’s portfolio gains 10% over the next year, then in one year the value of the investor’s assets in the fund will be $10,850. | ||
| If three years ago an investor invested a certain amount in Charles II, then the current value of his assets is greater than it would be if he had invested the same amount in William. | ||
| The range of 10-Year Average Annual Returns is greater for Mid-Cap funds than for LargeCap funds. |
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If today an investor invests $10,000 in Edward I and the fund’s portfolio gains 10% over the next year, then in one year the value of the investor’s assets in the fund will be $10,850.: Inferable
If three years ago an investor invested a certain amount in Charles II, then the current value of his assets is greater than it would be if he had invested the same amount in William.: Not Inferable
The range of 10-Year Average Annual Returns is greater for Mid-Cap funds than for LargeCap funds.: Not Inferable
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23 Dec 2023, 00:27
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The answer to the second one is not inferable because it is mentioned that the average return does not mean that is the same return for every year within that time period. So, it can go up one year and it can go down the next year. Based on this, we cannot conclude that the return amount will be higher or lower if an investment is made 3 years ago by looking at the average rate of return. Is my analysis correct ?
