Five years after graduating from college, Lucia Li feels that she is finally ready to invest some of her earnings. She has eliminated her credit card debt and has established an emergency fund. Her parents have been pleased with the performance of their mutual fund investments with Janus Capital Group. She has narrowed her search down to two mutual funds:

The Janus Balanced Fund: This “core” fund consists of stocks and bonds and its goal is diversification. It has historically produced solid long-term returns through different market cycles.

The Janus Overseas Fund: This fund invests in overseas companies based on their individual merits instead of their geography or industry sector.

The following table reports the annual returns (in percent) of these two funds over the past

10 years; these data, labeled Janus_Funds, are also available on the text website.

In a report, use the sample information to:
1. Calculate measures of central location to describe the similarities and the differences in these two funds’ returns.
2. Calculate measures of dispersion to assess the risk of each fund.
3. Calculate and interpret measures of correlation between the two funds.

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Data for Case Study 3.2 Returns (in percent) for Janus Funds Year 2000 2001 2002 2003 2004 Janus Balanced Fund -2.16 5.04 6.56 13.74 8.71 Janus Overseas Fund 18.57 23.11 23.89 36.79 18.58 Year 2005 2006 2007 2008 2009 Janus Balanced Fund 7.75 10.56 10.15 15.22 24.28 Janus Overseas Fund 32.39 47.21 27.76 52.75 78.12