Investing: Mutual Funds How reliable are mutual funds that
Chapter , Problem 10(choose chapter or problem)
Investing: Mutual Funds How reliable are mutual funds that invest in bonds? Again, this depends on the bond fund you buy (see reference in Problem 9). A random sample of annual percentage returns for mutual funds holding short term U.S. government bonds is shown below.
Use a calculator to verify that \(s^2 \approx 13.59\) for the preceding data. A random sample of annual percentage returns for mutual funds holding intermediate-term corporate bonds is shown below.
Use a calculator to verify that \(s^2 \approx 72.06\) for returns from mutual funds holding intermediate-term corporate bonds.
Use \(\alpha = 0.05\) to test the claim that the population variance for annual percentage returns of mutual funds holding short-term government bonds is different from the population variance for mutual funds holding intermediate-term corporate bonds. How could your test conclusion relate to the question of reliability of returns for each type of mutual fund?
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