Answered: Suppose a mutual fund qualifies as…

Calculus For The Life Sciences

2nd Edition

ISBN:9780321964038

Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Chapter13: Probability And Calculus

Section13.CR: Chapter 13 Review

Problem 10CR

See similar textbooks

Related questions

Question

Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly rate of return is less than 4%. A mutual-fund rating agency randomly selects 26 months and determines the rate of return for a certain fund. The standard deviation of the rate of return is computed to be 3.48%. Is there sufficient evidence to conclude that the fund has moderate risk at the alpha equals 0.05 level of significance? A normal probability plot indicates that the monthly rates of return are normally distributed.

a. Calculate the value of the test statistic.

chi squared equals

(Round to three decimal places as needed.)

b. Use technology to determine the P-value for the test statistic.

The P-value is

(Round to three decimal places as needed.)

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

Expert Solution