Question: Fidelity Magellan is a large cap growth mutual fund and Fidelity Small Cap Stock is a small cap growth mutual fund (Morningstar Funds 500, 2006).

Fidelity Magellan is a large cap growth mutual fund and Fidelity Small Cap Stock is a small cap growth mutual fund (Morningstar Funds 500, 2006). The standard deviation for both funds was computed based on a sample of size 26. For Fidelity Magellan, the sample standard deviation is 8.89%; for Fidelity Small Cap Stock, the sample standard deviation is 13.03%. Financial analysts often use the standard deviation as a measure of risk. Conduct a hypothesis test to determine whether the small cap growth fund is riskier than the large cap growth fund. Use α = .05 as the level of significance.

Step by Step Solution

3.30 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Consider the Small cap fund as population 1 and the large cap fund as population 2 Degrees o... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

553-M-S-S-I (2788).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!