Statistics for Business & Economics, Revised (MindTap Course List)
12th Edition
ISBN: 9781285846323
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
Publisher: South-Western College Pub
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Chapter 5, Problem 63SE
The Knowles/Armitage (KA) group at Merrill Lynch advises clients on how to create a diversified investment portfolio. One of the investment alternatives they make available to clients is the All World Fund composed of global stocks with good dividend yields. One of their clients is interested in a portfolio consisting of investment in the All World Fund and a treasury bond fund. The expected percent return of an investment in the All World Fund is 7.80% with a standard deviation of 18.90%. The expected percent return of an investment in a treasury bond fund is 5.50% and the standard deviation is 4.60%. The
- a. Which of the funds would be considered the more risky? Why?
- b. If KA recommends that the client invest 75% in the All World Fund and 25% in the treasury bond fund, what is the expected percent return and standard deviation for such a portfolio? What would be the expected return and standard deviation, in dollars, for a client investing $10,000 in such a portfolio?
- c. If KA recommends that the client invest 25% in the All World Fund and 75% in the treasury bond fund, what is the expected return and standard deviation for such a portfolio? What would be the expected return and standard deviation, in dollars, for a client investing $10,000 in such a portfolio?
Which of the portfolios in parts (b) and (c) would you recommend for an aggressive investor? Which would you recommend for a conservative investor? Why?
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9.2 Testing the Mean mu:
Problem 3
(1 point)
Test the claim that the population of sophomore college
students has a mean grade point average greater than 2.2.
Sample statistics include n = 71, x = 2.44, and s = 0.9.
Use a significance level of a = 0.01.
The test statistic is
The P-Value is between :
The final conclusion is
< P-value <
A. There is sufficient evidence to support the claim that
the mean grade point average is greater than 2.2.
○ B. There is not sufficient evidence to support the claim
that the mean grade point average is greater than 2.2.
Note: You can earn partial credit on this problem.
Note: You are in the Reduced Scoring Period. All work counts for
50% of the original.
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Chapter 5 Solutions
Statistics for Business & Economics, Revised (MindTap Course List)
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