You are considering two mutual funds from Fidelity as potential investment choices: FBGRX and FBCVX. FBGRX is a blue-chip growth fund that invests in well established, large-cap companies that are believed to have growth potential. 7 FBGRX invest in companies such as Amazon, Apple, and Facebook. FBCVX is a blue-chip value fund that also seeks capital appreciation in large-cap companies that they believed are undervalued and therefore a good buy. 9 FBCVX invests in companies such as Comcast Corp, Disney, and Exxon Mobile. Follow the steps outlined in the chapter to make the decision. The following returns were collected by Fidelity. 

  

a. State the hypothesis if you want to test the difference in mean between the two samples.  

b. Summarize the data for the two funds. 

c. Before you test the means, test the variance to determine which two-sample test you need to calculate. Is there a difference in variance? Follow the steps. 

d. Is there a statistical difference between mean return? (Follow the steps). 

• What is the critical value assuming 0.05 significance level?   
• What is the t-statistic?  
• Is there an economic difference?

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FBCVX (%) FBGRX (%) 2009 27.78 44.96 2010 10.05 19.61 2011 -8.02 -2.72 2012 13.83 17.77 2013 35.64 39.84 2014 13.19 14.60 2015 -1.96 6.28 2016 11.19 1.59 2017 14.87 36.06 2018 -8.65 1.07 FBCVX (%) FBGRX (%) 2009 27.78 44.96 2010 10.05 19.61 2011 -8.02 -2.72 2012 13.83 17.77 2013 35.64 39.84 2014 13.19 14.60 2015 -1.96 6.28 2016 11.19 1.59 2017 14.87 36.06 2018 -8.65 1.07

Answer rating: 100% (QA)

aH0 There is no difference in mean between the two samples H1 There is a difference in mean between the two samples The average or mean of a set of values is the sum of the values divided by the numbe... View the full answer