Morningstar (www.morningstar.com) selects mutual funds as Medalist funds expected to perform well over the long term. You
Question:
Morningstar (www.morningstar.com) selects mutual funds as “Medalist” funds expected to perform well over the long term. You have decided to invest in a bond fund and plan to limit your choice of funds to Morningstar “medalist” funds. But now you must choose between a taxable fund and a municipal bond fund that is at least partially tax-free. Which is better? Here are the % returns for the three-year period leading up to spring of 2013:
Taxable bond funds
10.83, 6.45, 8.52, 10.9, 4.16, 10.48, 6.07, 2.69, 1.24, 1.58, 4.02, 5.64, 6.29, 12.36
Municipal bond funds
8.34, 7.3, 6.07, 6.46, 5.77, 5.89, 5.76, 5.81, 5.12, 5.63, 4.71, 5.22, 5.21, 3.12, 4.77, 2.2
a) Write the null and alternative hypotheses.
b) Check the conditions.
c) Test the hypothesis and find the P-value.
d) Is there a significant difference in 3-year returns between these two kinds of funds?
Mutual FundsMutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the...
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Business Statistics
ISBN: 9780321925831
3rd Edition
Authors: Norean Sharpe, Richard Veaux, Paul Velleman