Answered: Colonial Funds claims to have a bond…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Colonial Funds claims to have a bond fund which has performed consistently throughout the past year. The variance of the share price is claimed to be 0.18. To test this claim, an investor randomly selects 24 days during the last year to check the performance of the fund. He finds an average share price of $8.80 with a standard deviation of 0.4087. Can the investor conclude that the variance of the share price of the bond fund is different than claimed at α=0.05? Assume the population is normally distributed.

Step 1 of 5: State the null and alternative hypotheses. Round to four decimal places when necessary.

Step 3 of 5: Determine the value of the test statistic. Round your answer to three decimal places.

Step 4 of 5: Make the decision.

Step 5 of 5: What is the conclusion?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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