Standard deviation of returns is often used as a measure of a mutual funds volatility (risk). A

Question:

Standard deviation of returns is often used as a measure of a mutual fund’s volatility (risk). A larger standard deviation of returns is an indication of higher risk. According to Morningstar.com (June 17, 2010), the American Century Equity Income Institutional Fund, a large cap fund, has a standard deviation of returns equal to 14.11 percent. Morningstar.com also reported that the Fidelity Small Cap Discovery Fund has a standard deviation of returns equal to 28.44 percent. Each standard deviation was computed using a sample of size 36. Perform a hypothesis test to determine if the variance of returns for the Fidelity Small Cap Discovery Fund is larger than the variance of returns for the American Century Equity Income Institutional Fund. Perform the test at the .05 level of significance, and assume normality.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Essentials Of Business Statistics

ISBN: 9780078020537

5th Edition

Authors: Bruce Bowerman, Richard Connell, Emily Murphree, Burdeane Or

Question Posted: