Mutual fund returns. In March 2002, Consumer Reports listed the rate of return for several large cap mutual funds over the previous 3-year and 5-year periods. (Here, “large cap” refers to companies worth over $10 billion.) It’s common for advertisements to carry the disclaimer that “past returns may not be indicative of future performance.” Do these data indicate that there was an association between 3-year and 5-year rates of return?

Transcribed Image Text:

Annualized Returns (%) Fund Name 3-year 5-year Ameristock 7.9 17.1 Clipper 14.1 18.2 Credit Suisse Strategic Value 5.5 11.5 Dodge & Cox Stock 15.2 15.7 Excelsior Value 13.1 16.4 Harbor Large Cap Value 6.3 11.5 ICAP Discretionary Equity 6.6 11.4 ICAP Equity 7.6 12.4 Neuberger Berman Focus 9.8 13.2 PBHG Large Cap Value 10.7 18.1 Pelican 7.7 12.1 Price Equity Income 6.1 10.9 USAA Cornerstone Strategy 2.5 4.9 Vanguard Equity Income 3.5 11.3 Vanguard Windsor 11.0 11.0