Answered: How reliable are mutual funds that…

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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How reliable are mutual funds that invest in bonds? This depends on the bond fund you buy.

A random sample of annual percentage returns for mutual funds holding short-term U.S. government bonds is shown below.

4.6	4.7	1.8	9.5	-0.9	4.1	10.5
4.2	3.5	3.9	9.8	-1.2	7.3

Use a calculator to verify that s² ≈ 13.891 for the preceding data.

A random sample of annual percentage returns for mutual funds holding intermediate-term corporate bonds is shown below.

-0.9	3.6	20.4	7.1	-0.7	18.8	-3.4	10.5
8.0	-0.9	2.6	14.9	-6.5	8.2	18.8	14.2

Use a calculator to verify that s² ≈ 72.798 for returns from mutual funds holding intermediate-term corporate bonds.

Use α = 5% 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?

(a) What is the level of significance?

(b) Find the value of the sample F statistic. (Use 2 decimal places.)

What are the degrees of freedom?

df_N
df_D

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