A mutual fund is a professionally managed investmentscheme that pools money from many

Chapter 1, Problem 53

(choose chapter or problem)

A mutual fund is a professionally managed investmentscheme that pools money from many investors andinvests in a variety of securities. Growth funds focus primarilyon increasing the value of investments, whereasblended funds seek a balance between current incomeand growth. Here is data on the expense ratio (expensesas a % of assets, from www.morningstar.com) for samplesof 20 large-cap balanced funds and 20 large-capgrowth funds (large-cap refers to the sizes of companiesin which the funds invest; the population sizes are825 and 762, respectively):Bl 1.03 1.23 1.10 1.64 1.301.27 1.25 0.78 1.05 0.640.94 2.86 1.05 0.75 0.090.79 1.61 1.26 0.93 0.84Gr 0.52 1.06 1.26 2.17 1.550.99 1.10 1.07 1.81 2.050.91 0.79 1.39 0.62 1.521.02 1.10 1.78 1.01 1.15a. Calculate and compare the values of , , and s for thetwo types of funds.b. Construct a comparative boxplot for the two types offunds, and comment on interesting features.