How reliable are mutual funds that invest in bonds? Again, this depends on the bond fund you buy (see reference in Problem 9). A random sample of annual percentage returns for mutual funds holding short-term U.S. government bonds is shown next.

Use a calculator to verify that s² ≈ 13.59 for the preceding data.

A random sample of annual percentage returns for mutual funds holding intermediate-term corporate bonds is shown next.

Use a calculator to verify that s² ≈ 72.06 for returns from mutual funds holding intermediate-term corporate bonds.

Use a – 0.05 to test the claim that the population variance for annual percentage returns of mutual funds holding short-term government bonds is different from the population variance for mutual funds holding intermediate term corporate bonds. How could your test conclusion relate to the question of reliability of returns for each type of mutual fund?

Please provide the following information.

(a) What is the level of signi­ficance? State the null and alternate hypotheses.

(b) Find the value of the sample F statistic. What are the degrees of freedom?

What assumptions are you making about the original distribution?

(c) Find or estimate the P-value of the sample test statistic.

(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis?

(e) Interpret your conclusion in the context of the application.

Transcribed Image Text:

4.6 4.7 1.9 9.3 -0.8 4. 10.5 4.2 3.5 3.9 9.8-1.2 7.3 08 3.6 20.2 7.8-0.4 18.8-3.4 10.5 8.0-0.9 2.6-6.5 1498.2 18.8 14.2