The case illustrates the issues involved in selecting a mutual fund when a married couple is trying to determine in which mutual fund(s) to invest. The couple is attempting to predict future returns on mutual funds based on factors such as past performance, management expense ratios, etc. Considerable data are provided about a wide selection of Canadian equity mutual funds.

An independent insurance broker is considering investing in high yield bonds to improve his portfolio's performance. He does not think that the returns he has received on his current equity and fixed income investments will continue into the future. He considers using historical data to construct efficient frontiers which suggest that high yield bonds improve the risk/return trade-off. A key issue is to what extent this historical improvement .....more