Asked by Brian Dykstra on May 11, 2024
Verified
For the five-year period ended December 31, 2006, the Sprott Canadian Equity Fund had the best performance of all diversified Canadian equity funds. It effectively earned a compound annual return of 31.6% compared to the average of 10.1% for over 300 diversified Canadian equity funds with a five-year history. How much more would an initial $1,000 investment in the Sprott Canadian Equity Fund have earned over the five-year period than a $1,000 investment in a fund earning the average rate of return?
Compound Annual Return
The rate at which an investment grows annually over a specified period, taking into account the effect of compounding.
Diversified Canadian Equity Funds
Investment funds that spread their holdings across a wide range of Canadian stocks to mitigate risk and maximize returns.
Initial Investment
The initial amount of money put into a project, investment, business venture, or financial asset.
- Analyze investment performance by comparing returns of different investment options.
Verified Answer
FS
Learning Objectives
- Analyze investment performance by comparing returns of different investment options.