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Chapter 9, Problem 26AYU(choose chapter or problem)
Problem 26AYU
Problem
Which Investment Is Better? You have received a yearend bonus of $5000. You decide to invest the money in the stock market and have narrowed your investment options down to two mutual funds. The following data represent the historical quarterly rates of return of each mutual fund for the past 20 quarters (5 years).
MUTUAL FUND A | ||||
1.3 |
0.3 |
0.6 |
6.8 |
5.0 |
5.2 |
4.8 |
2.4 |
3.0 |
1.8 |
7.3 |
8.6 |
3.4 |
3.8 |
−1.3 |
6.4 |
1.9 |
−0.5 |
−2.3 |
3.1 |
MUTUAL FUND B | ||||
−5.4 |
6.7 |
11.9 |
4.3 |
4.3 |
3.5 |
10.5 |
2.9 |
3.8 |
5.9 |
−6.7 |
1.4 |
8.9 |
0.3 |
−2.4 |
−4.7 |
−1.1 |
3.4 |
7.7 |
12.9 |
Describe each data set. That is, determine the shape, center, and spread. Which mutual fund would you invest in and why?
Questions & Answers
QUESTION:
Problem 26AYU
Problem
Which Investment Is Better? You have received a yearend bonus of $5000. You decide to invest the money in the stock market and have narrowed your investment options down to two mutual funds. The following data represent the historical quarterly rates of return of each mutual fund for the past 20 quarters (5 years).
MUTUAL FUND A | ||||
1.3 |
0.3 |
0.6 |
6.8 |
5.0 |
5.2 |
4.8 |
2.4 |
3.0 |
1.8 |
7.3 |
8.6 |
3.4 |
3.8 |
−1.3 |
6.4 |
1.9 |
−0.5 |
−2.3 |
3.1 |
MUTUAL FUND B | ||||
−5.4 |
6.7 |
11.9 |
4.3 |
4.3 |
3.5 |
10.5 |
2.9 |
3.8 |
5.9 |
−6.7 |
1.4 |
8.9 |
0.3 |
−2.4 |
−4.7 |
−1.1 |
3.4 |
7.7 |
12.9 |
Describe each data set. That is, determine the shape, center, and spread. Which mutual fund would you invest in and why?
ANSWER:
Answer :
Step 1 :
Given, You have received a yearend bonus of $5000. You decide to invest the money in the stock market and have narrowed your investment options down to two mutual funds. The following data represent the historical quarterly rates of return of each mutual fund for the past 20 quarters (5 years).
MUTUAL FUND A | ||||
1.3 |
0.3 |
0.6 |
6.8 |
5.0 |
5.2 |
4.8 |
2.4 |
3.0 |
1.8 |
7.3 |
8.6 |
3.4 |
3.8 |
−1.3 |
6.4 |
1.9 |
|||