1. The expense ratio of a mutual fund measures the percentage of the fund's assets used to pay for annual administrative overhead. Funds with higher ratios spend more of the fund's return to operate the fund. A random selection of 16 stock mutual funds last year revealed the following data:

Expense Ratio, X	Total Return, Y
0.62 1.21 1.03 0.67 0.40 1.12 0.78 0.47 0.75 0.92 0.57 0.95 0.20 1.00 1.25 1.03	34.3 33.0 31.4 30.8 32.9 27.6 30.3 31.9 33.8 27.9 32.6 24.3 36.3 31.7 29.9 34.7

• Construct a scatter plot of the data.

• Draw the least-squares line on the scatter plot.

• Find the equation for the least-squares line of best fit.

• Interpret the regression coefficients. Does expense hurt or help the fund❝s return?

• Predict the total return for a stock fund with an expense ratio of 0.81%. What can you conclude?

Answer rating: 100% (QA)

Expense Ratio X Total Return Y 062 343 121 33 103 314 067 308 scatter plot 04 329 4... View the full answer