You are tasked with comparing two Icelandic equity funds. The other fund is called the RU IS Equity Fund (RIS). The other fund is called HÍ IS Equity Fund (HIS). It is known that the funds had the following ratios in certain shares over the period 2018 to 2021 (it is not assumed that they received dividends during the period). The proportions did not change over the period. The price of individual shares over the period can be found in the red box down below the text.
a) Draw a picture that compares the development of 100,000 ISK. investments in each fund made at the beginning of 2018
b) What was the return on RIS and HIS over the period
c) What was the average annual return of RIS and HIS over the period
d) What is the correlation between the exchange rates of these two funds? Also show calculations with a formula
e) What is the variance and what is the standard deviation of each fund? Why is this information important when it comes to investment decisions?
You are tasked with comparing two Icelandic equity funds. The other fund is called the RU IS Equity Fund (RIS). The other fund is called HÍ IS Equity Fund (HIS). It is known that the funds had the following ratios in certain shares over the period 2018 to 2021 (it is not assumed that they received dividends during the period). The proportions did not change over the period. The price of individual shares over the period can be found in the red box down below the text.
a) Draw a picture that compares the development of 100,000 ISK. investments in each fund made at the beginning of 2018
b) What was the return on RIS and HIS over the period
c) What was the average annual return of RIS and HIS over the period
d) What is the correlation between the exchange rates of these two funds? Also show calculations with a formula
e) What is the variance and what is the standard deviation of each fund? Why is this information important when it comes to investment decisions?
