# Tax efficiency is a measure, ranging from 0 to 100, of how much tax due to capital gains stock or mutual funds investors pay on their investments each year; the higher the tax efficiency, the lower is the tax. In the article At the Mercy of the Manager (Financial Planning, Vol. 30(5), pp. 54-56), C. Israelsen examined the relationship between

Tax efficiency is a measure, ranging from 0 to 100, of how much tax due to capital gains stock or mutual funds investors pay on their investments each year; the higher the tax efficiency, the lower is the tax. In the article "At the Mercy of the Manager" (Financial Planning, Vol. 30(5), pp. 54-56), C. Israelsen examined the relationship between investments in mutual fund portfolios and their associated tax efficiencies. The following table shows percentage of investments in energy securities (x) and tax efficiency (y) for 10 mutual fund portfolios. For part (g), predict the tax efficiency of a mutual fund portfolio with 5.0% of its investments in energy securities and one with 7.4% of its investments in energy securities.

a. Find the regression equation for the data points.
b. Graph the regression equation and the data points.
c. describe the apparent relationship between the two variables under consideration.
d. Interpret the slope of the regression line.
e. Identify the predictor and response variables.
f. Identify outliers and potential influential observations.
g. Predict the values of the response variable for the specified values of the predictor variable, and interpret your results.

Mutual Funds
Mutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...