20. Investing: Socially Responsible Mutual Funds Pax World Balanced is a highly respected, socially responsible mutual fund of stocks and bonds (see Viewpoint). Vanguard Balanced Index is another highly regarded fund that represents the entire U.S. stock and bond market (an index fund). The mean and standard deviation of annualized percent returns are shown below. The annualized mean and standard deviation are for a recent 10-year period (Source: Fund Reports). Pax World Balanced: x 9.58%; s = 14.05% Vanguard Balanced Index: x 9.02%; s = 12.50% (a) Interpretation Compute the coefficient of variation for each fund. Ifx represents return and s represents risk, then explain why the coefficient of variation can be taken to represent risk per unit of return. From this point of view, which fund appears to be better? Explain. (b) Interpretation Compute a 75% Chebyshev interval around the mean for each fund. Use the intervals to compare the two funds. As usual, past per- formance does not guarantee future performance.
20. Investing: Socially Responsible Mutual Funds Pax World Balanced is a highly respected, socially responsible mutual fund of stocks and bonds (see Viewpoint). Vanguard Balanced Index is another highly regarded fund that represents the entire U.S. stock and bond market (an index fund). The mean and standard deviation of annualized percent returns are shown below. The annualized mean and standard deviation are for a recent 10-year period (Source: Fund Reports). Pax World Balanced: x 9.58%; s = 14.05% Vanguard Balanced Index: x 9.02%; s = 12.50% (a) Interpretation Compute the coefficient of variation for each fund. Ifx represents return and s represents risk, then explain why the coefficient of variation can be taken to represent risk per unit of return. From this point of view, which fund appears to be better? Explain. (b) Interpretation Compute a 75% Chebyshev interval around the mean for each fund. Use the intervals to compare the two funds. As usual, past per- formance does not guarantee future performance.
MATLAB: An Introduction with Applications
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ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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Transcribed Image Text:20. Investing: Socially Responsible Mutual Funds Pax World Balanced is a
highly respected, socially responsible mutual fund of stocks and bonds (see
Viewpoint). Vanguard Balanced Index is another highly regarded fund that
represents the entire U.S. stock and bond market (an index fund). The mean
and standard deviation of annualized percent returns are shown below. The
annualized mean and standard deviation are for a recent 10-year period
(Source: Fund Reports).
Pax World Balanced: x 9.58%; s = 14.05%
Vanguard Balanced Index: x
9.02%; s = 12.50%
(a) Interpretation Compute the coefficient of variation for each fund. Ifx
represents return and s represents risk, then explain why the coefficient of
variation can be taken to represent risk per unit of return. From this point
of view, which fund appears to be better? Explain.
(b) Interpretation Compute a 75% Chebyshev interval around the mean for
each fund. Use the intervals to compare the two funds. As usual, past per-
formance does not guarantee future performance.
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