Question

Mutual funds that specialize in the stock of natural resources companies showed considerable variation in their performance during the 12-month period ending July 2010. Consider the Rate of Return column in Table 5.5.3.
a. Find the average rate of return for these funds.
b. Find the standard deviation and briefly interpret this value.
c. How many of these mutual funds are within one standard deviation from the average? How does this compare to what you expect for a normal distribution?
d. How many of these mutual funds are within two standard deviations from the average? How does this compare to what you expect for a normal distribution?
e. How many of these mutual funds are within three standard deviations from the average? How does this compare to what you expect for a normal distribution?
f. Draw a histogram of this data set and indicate limits of one, two, and three standard deviations on the graph. Interpret your answers to parts c, d, and e in light of the shape of the distribution.


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  • CreatedNovember 11, 2015
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