# Question

In Exercise 4.50, you determined a regression equation that relates the variables percentage of investments in energy securities and tax efficiency for mutual fund portfolios.

a. Should that regression equation be used to predict the tax efficiency of a mutual fund portfolio with 6.4% of its investments in energy securities? with 15% of its investments in energy securities? Explain your answers.

b. For which percentages of investments in energy securities is use of the regression equation to predict tax efficiency reasonable?

a. Should that regression equation be used to predict the tax efficiency of a mutual fund portfolio with 6.4% of its investments in energy securities? with 15% of its investments in energy securities? Explain your answers.

b. For which percentages of investments in energy securities is use of the regression equation to predict tax efficiency reasonable?

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