# Question

Consider three stock funds, which we will call Stock Funds 1, 2, and 3. Suppose that Stock Fund 1 has a mean yearly return of 10.93 percent with a standard deviation of 41.96 percent, Stock Fund 2 has a mean yearly return of 13 percent with a standard deviation of 9.36 percent, and Stock Fund 3 has a mean yearly return of 34.45 percent with a standard deviation of 41.16 percent.

a. For each fund, find an interval in which you would expect 95.44 percent of all yearly returns to fall. Assume returns are normally distributed.

b. Using the intervals you computed in part a, compare the three funds with respect to average yearly returns and with respect to variability of returns.

c. Calculate the coefficient of variation for each fund, and use your results to compare the funds with respect to risk. Which fund is riskier?

a. For each fund, find an interval in which you would expect 95.44 percent of all yearly returns to fall. Assume returns are normally distributed.

b. Using the intervals you computed in part a, compare the three funds with respect to average yearly returns and with respect to variability of returns.

c. Calculate the coefficient of variation for each fund, and use your results to compare the funds with respect to risk. Which fund is riskier?

## Answer to relevant Questions

Explain each of the following in your own words: a percentile; the first quartile, Q1 ; the third quartile, Q3 ; and the interquartile range, IQR. Construct a box- and- whiskers display of the following 12 household incomes When we compute the mean, variance, and standard deviation using grouped data, the results obtained are approximations of the population (or sample) mean, variance, and standard deviation. Explain why this is true. The following table gives the value of the Dow Jones Industrial Average (DJIA), NASDAQ, and the S& P 500 on the first day of trading for the years 2008 through 2010. a. For each stock index, compute the rate of return from ...Define the following terms: experiment, event, probability, sample space.Post your question

0