EBK STATISTICS FOR BUSINESS & ECONOMICS
12th Edition
ISBN: 8220100460463
Author: Anderson
Publisher: CENGAGE L
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Chapter 5, Problem 60SE
The American Association of Individual Investors publishes an annual guide to the top mutual funds (The Individual Investor’s Guide to the Top Mutual Funds, 22e, American Association of Individual Investors, 2003). The total risk ratings for 29 categories of mutual funds are as follows.
| Total Risk | Number of Fund Categories |
| Low | 7 |
| Below Average | 6 |
| Average | 3 |
| Above Average | 6 |
| High | 7 |
- a. Let x = 1 for low risk up through x = 5 for high risk, and develop a
probability distribution for level of risk. - b. What are the
expected value and variance for total risk? - c. It turns out that 11 of the fund categories were bond funds. For the bond funds, seven categories were rated low and four were rated below average. Compare the total risk of the bond funds with the 18 categories of stock funds.
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Chapter 5 Solutions
EBK STATISTICS FOR BUSINESS & ECONOMICS
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