Mutual funds are classified as load or no-load funds. Load funds require an investor to pay an initial fee based on a percentage of the amount invested in the fund. The no-load funds do not require this initial fee. Some financial advisors argue that the load mutual funds may be worth the extra fee because these funds provide a higher mean rate of return than the no-load mutual funds. A sample of 30 load mutual funds and a sample of 30 no-load mutual funds selected for analysis are contained in the Excel Online file below. Data were collected on the annual return for the funds over a five-year period. Construct a spreadsheet to answer the following questions. х Open spreadsheet a. Formulate Но and H, such that rejection of Ho leads to the conclusion that the load mutual funds have a higher mean annual return over the five-year period. Η0: μιοad Uno-load Ha : Hload Uno-load b. Use the 60 mutual funds in the table above to conduct the hypothesis test. What is the p-value? p-value is (to 4 decimals) At a = .05, what is your conclusion? Can conclude that the mutual funds with a load have a greater mean rate of return. Н Mutual Funds - Load Load Return Mutual Funds - No Load No Load Return Part b Formula 2 American National Growth 17.11 Amana Income Fund 11.24 T Test: Two-Sample Assuming Unequal Variances 3 Arch Small Cap Equity 15.07 Berger One Hundred 10.13 4 Bartlett Cap Basic 17.43 Columbia Intemational Stock 10.17 Load Return 11.24 Calvert World International 9.31 Dodge & Cox Balanced 14.06 Mean 16.23566667 13.78965517 6. Colonial Fund A 17.43 Evergreen Fund 15.61 Variance 17.19126678 11.15521773 Common Sense Growth 16.34 Fidelity Fund 18.61 Observations 30 29 Hypothesized Mean Difference Corefund Core Equity 9. 19.17 Forthis Advtg Cap App 11.38 Davis Convert Seurities 18.51 Founders Blue Chip Fund 15.15 df 55 10 t Stat 2.499439548 Deleware Small Cap 11 18.97 Goldman Core Fixed Income 8.38 P(T<=t) one-tail t Critical one-tail P(T<=t) two-tail t Critical two-tail 0.007726349 Dreyfus Premium Value 12 11.65 Heartland Value 16.15 Federated Stocks & Bonds 14.81 Janus Fund 13.82 1.673033907 13 First Invest FD for Income 10.94 Manstay Cap Appriciation 15.29 0.015452698 14 2.004044732 Flag Inv Emerging Growth 15 16.09 Merrill Spec Value 14.42 Fortis Equity Capital 11.56 Mutual Beacon 17.49 16 FPA Capital 24.66 Oberweis Emerging Growth 9.06 17 Franklin STR GL UT 17.38 Paine Webber Growth & Income 11.89 Significance Level (Alpha) 0.05 18 Gabelli Value Fund 24.05 Pimco Total Return 6.43 Can we conclude that the mutual funds with a load have a greater mean rate of return? (Enter "Can conclude" or "Cannot conclude"). 19 IDS New Dimensions 19.68 Prudential Equity 16.29 #N/A 20 John Hancock Growth & Income 16.46 Putnam Growth & Income 15.80 21 Lord Abbett Dev Growth 23.05 Royce FD Micro-Cap 15.05 22 Merrill Basic Value 22.15 Scudder Development 10.80 23 MFS World Tot Return 12.19 Smith Barney Appreciation 13.09 24 New England Growth Opp 25 Stein Roe Capital Oppty 18.06 17.70 T Rowe Price Balanced Oppenhmr Quest Small Cap 26 14.97 11.57 Phoenix Worldwide 14.48 Thompson Plumb Growth 16.58 27 Princor Bond 7.90 USAA Growth & Tax Strat 9.89 28 Stagecoach Disd Income 29 14.82 Vanguard Equity Income 17.00 Vanguard Windsor Vontobel Intl Equity United Contl Income 12.19 18.71 30 Victory OH Regional 31 17.64 11.56 Zweig SR TR Apprec 32 13.00 Weith Value 17.82 ш