Asked by Yesenia Gomez on Apr 26, 2024
Verified
At the end of 2009, the Industrial Alliance (IA) Group Dividends Fund had the best 10-year compound annual return of any Canadian diversified equity mutual fund. During the 10-year period, this fund invested primarily in the shares of large Canadian companies. The fund's annual returns in successive years from 2000 to 2009 inclusive were 33.5%, 9.2%, 2.2%, 25.8%, 17.9%, 27.9%, 19.7%, 6.3%, -26.0%, and 21.5%, respectively. For 3-year, 5-year, and 10-year periods ended December 31, 2009, what was the fund's equivalent annual compounded return?
Compound Annual Return
The annualized average percentage rate of return that accounts for the compounding of interest over a period of time.
Diversified Equity Mutual Fund
A mutual fund that invests in a wide range of equities from various sectors to reduce investment risk.
Canadian Companies
Businesses that are registered, operated or have a significant presence in Canada.
- Acquire the skill to compute and understand equivalent yearly compounded returns.
- Examine the efficacy of mutual funds by evaluating their historical data to determine their compounded annual growth rates.
Verified Answer
EM
erica meyersApr 29, 2024
Final Answer :
3-year: 1.34 % compounded annually, 5-year: 9.76% compounded annually, 10-year: 13.41% compounded annually
Learning Objectives
- Acquire the skill to compute and understand equivalent yearly compounded returns.
- Examine the efficacy of mutual funds by evaluating their historical data to determine their compounded annual growth rates.