RUNNING HEAD: INVESTMENT RISK AND RETURN

Investment Risk and Return

Name.

Institution.

Date.
INVESTMENT RISK AND RETURN 2

Answers to questions in Power point slides

1. The best funds to invest in are Repetitious funds as the funds have a constant rate of return.

Sound funds and Erratic funds have high low volatilities hence cannot be pre-determined in

future.

2. In this case, I would invest on any of the funds, since annual average rate is at 10%, constant

for all funds.

3. The funds despite of having the same average return over the same number of years have

different realized returns since each year the values of cash flows are different hence given

the same average return, the fund with the most volatile returns will produce the lowest

realized returns.