Question: The average standard deviation for the annual return of large
The average standard deviation for the annual return of large cap stock mutual funds is 18.2% (The Top Mutual Funds, AAII, 2004). The sample standard deviation based on a sample of size 36 for the Vanguard PRIMECAP mutual fund is 22.2%. Construct a hypothesis test that can be used to determine whether the standard deviation for the Vanguard fund is greater than the average standard deviation for large cap mutual funds. With a .05 level of significance, what is your conclusion?
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