Answered: Mutual funds are classified as load or…

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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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 and 30 no-load funds were selected. Data were collected on the annual return for the funds over a five-year period. The data are contained in the data set Mutual. Conduct an appropriate hypothesis test to determine whether the load funds have a higher mean annual return over the five-year period. Include the error you might be committing.

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