A local security offers its employees the following investment products for their retirement plans:

Total Bond Fund (T)
Short-Term Bond Fund (ST)
Magellan Fund (M)
International Small Cap Fund (I)
Freedom Income Fund (F)

After working at the security company for a year, Chuck Bartowski is now eligible to participate in the retirement plan. He has already decided to invest a portion of his retirement funds in the Magellan fund. He would like to choose one other fund that has the smallest correlation, preferably zero, with the Magellan fund. He collects 5 years of monthly return data for each mutual fund.

Date	Magellan	Total Bond	Short-term Bond	International Small Cap	Freedom
1/3/2006	0.0477	0.0026	0.0013	0.0904	0.0107
2/1/2006	-0.0149	0.0026	0.0027	-0.0152	0.0000
3/1/2006	0.0267	-0.0066	0.0013	0.0549	0.0032
4/3/2006	0.0192	0.0000	0.0027	0.0646	0.0032
5/1/2006	-0.0488	-0.0013	0.0013	-0.0778	-0.0063
6/1/2006	-0.0073	0.0013	0.0027	-0.0350	0.0000
7/3/2006	-0.0313	0.0145	0.0066	-0.0133	0.0053
8/1/2006	0.0240	0.0143	0.0092	0.0140	0.0116
9/1/2006	0.0112	0.0090	0.0052	-0.0261	0.0094
10/2/2006	0.0292	0.0064	0.0039	0.0290	0.0124
11/1/2006	0.0260	0.0114	0.0065	0.0282	0.0122
12/1/2006	-0.0054	-0.0038	0.0013	0.0305	0.0000
1/3/2007	0.0288	0.0000	0.0026	0.0125	0.0071
2/1/2007	-0.0166	0.0151	0.0051	0.0129	0.0040
3/1/2007	0.0082	0.0000	0.0038	0.0333	0.0050
4/2/2007	0.0482	0.0049	0.0038	0.0469	0.0139
5/1/2007	0.0407	-0.0074	-0.0013	0.0353	0.0068
6/1/2007	-0.0042	-0.0037	0.0000	0.0319	-0.0039
7/2/2007	-0.0183	0.0025	0.0013	0.0106	-0.0049
8/1/2007	0.0115	0.0050	-0.0088	-0.0729	0.0020
9/4/2007	0.0621	0.0086	0.0089	0.0606	0.0157
10/1/2007	0.0533	0.0024	-0.0038	0.0712	0.0087
11/1/2007	-0.0379	0.0110	0.0025	-0.0768	-0.0086
12/3/2007	0.0035	0.0036	0.0025	-0.0276	0.0019
1/2/2008	-0.0896	0.0120	0.0063	-0.0939	-0.0058
2/1/2008	-0.0160	0.0000	0.0000	0.0421	-0.0039
3/3/2008	-0.0219	-0.0036	-0.0163	-0.0244	-0.0078
4/1/2008	0.0651	0.0012	-0.0051	0.0327	0.0147
5/1/2008	0.0306	-0.0036	0.0038	0.0498	0.0039
6/2/2008	-0.0837	-0.0012	0.0013	-0.0634	-0.0154
7/1/2008	-0.0394	-0.0036	0.0013	-0.0649	-0.0068
8/1/2008	-0.0008	0.0060	0.0013	-0.0557	0.0029
9/2/2008	-0.1796	-0.0323	-0.0064	-0.1599	-0.0353
10/1/2008	-0.2161	-0.0556	-0.0115	-0.2497	-0.0650
11/3/2008	-0.1133	-0.0092	-0.0181	-0.0460	-0.0261
12/1/2008	0.0489	0.0356	0.0040	0.0758	0.0190
1/2/2009	-0.0754	0.0153	0.0039	-0.0680	-0.0142
2/2/2009	-0.0758	-0.0063	-0.0026	-0.0712	-0.0255
3/2/2009	0.1389	0.0139	0.0039	0.0374	0.0251
4/1/2009	0.1369	0.0286	0.0078	0.1228	0.0356
5/1/2009	0.0622	0.0315	0.0117	0.1768	0.0290
6/1/2009	-0.0137	0.0153	0.0064	0.0231	0.0083
7/1/2009	0.0876	0.0324	0.0102	0.0738	0.0321
8/3/2009	0.0216	0.0134	0.0101	0.0445	0.0170
9/1/2009	0.0531	0.0199	0.0087	0.0548	0.0217
10/1/2009	-0.0543	0.0108	0.0074	-0.0139	-0.0019
11/2/2009	0.0545	0.0118	0.0074	0.0205	0.0193
12/1/2009	0.0436	-0.0042	-0.0037	0.0069	0.0057
1/4/2010	-0.0438	0.0170	0.0086	-0.0211	-0.0019
2/1/2010	0.0301	0.0031	0.0036	-0.0035	0.0085
3/1/2010	0.0662	0.0052	0.0000	0.0613	0.0159
4/1/2010	0.0151	0.0799	0.0036	0.0193	0.0101
5/3/2010	-0.0811	0.0000	0.0012	-0.1080	-0.0192
6/1/2010	-0.0647	0.0134	0.0060	-0.0006	-0.0047
7/1/2010	0.0506	0.0142	0.0048	0.0745	0.0206
8/2/2010	-0.0592	0.0121	0.0048	-0.0180	-0.0055
9/1/2010	0.1083	0.0065	0.0036	0.1326	0.0249
10/1/2010	0.0361	0.0083	0.0035	0.0471	0.0144
11/1/2010	0.0136	-0.0064	-0.0024	-0.0179	-0.0044
12/1/2010	0.0586	-0.0183	-0.0035	0.0478	0.0036

M&ST test-statistic = (5 points) p-value = Can we reject Ho? Why? M&I test-statistic = (5 points) p-value = Can we reject Ho? Why? M&F test-statistic = (5 points) p-value = Can we reject Ho? Why? Make an investment recommendation for Chuck. (5 points)The sample correlation coefficients of each fund with Magellan are: M & T M & ST M &I M & F (4 points) Coefficient: The highest sample correlation coefficient is with Magellan and: The lowest sample correlation coefficient is with Magellan and: (Click on the yellow cell to bring up the drop-down menu) (4 points) To test if each correlation coefficient is statistically significant, use the following hypotheses which will be the same for each test. Ho: Pxy = 0 HA: Pxy * 0 a = 0.05 Please round ALL numerical answers to 4 decimal places. M&T test-statistic = (5 points) p-value = Can we reject Ho? Why