Do Mutual Funds Understate Their Volatility?

Kochman, Ladd; Badarinathi, Ravij; Goodwin, Randy
June 2001
American Business Review;Jun2001, Vol. 19 Issue 2, p106
Academic Journal
Determines the extent to which investors understate the standard deviations of their mutual funds, using Fidelity's domestic and non-sector growth funds. Methods of calculating the standard deviations of the Fidelity mutual funds; Errors and consequences of multiplying a fund's monthly standard deviation by the square root of twelve; Failure of funds to achieve a high level of diversification.


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