Templeton World is a mutual fund that invests in both U.S. and foreign markets. Let x be
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(a) The Templeton World fund has over 250 stocks that combine together to give the overall monthly percentage return x. We can consider the monthly return of the stocks in the fund to be a sample from the population of monthly returns of all world stocks. Then we see that the overall monthly return x for the Templeton World fund is itself an average return computed using all 250 stocks in the fund. Why would this indicate that x has an approximately normal distribution? Explain.
(d) Compare your answers to parts (b) and (c). Did the probability increase as n (number of months) increased? Why would this happen?
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... 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...
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Related Book For
Understanding Basic Statistics
ISBN: 9781111827021
6th Edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
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