Exercise 3.(10pts)Investing: Socially Responsible Mutual FundsPax World Balanced is a highly respected, socially responsible mutual fundof stocks and bonds (see Viewpoint).Vanguard Balanced Index is anotherhighly regarded fund that represents the entire U.S. stock and bond market(an index fund).The mean and standard deviation of annualized percentreturns are shown below. The annualized mean and standard deviation areforarecent10-yearsperiod.(Source:FundReports).

PaxWorldBalanced: X =9.58%,s=14.05%

VanguardBalancedIndex: X =9.02%,s=12.50%

(3a)(5pts)Compute the coefficient of variation for each fund. IfXrep-resentsreturnandsrepresentsrisk.Fromthispointofview,whichfundappearstobebetter?Explain.

(3b)(5pts)Computea75%Chebyshev'sintervalaroundthemeanforeachfund.Use the intervals to compare the two funds.As usual,pastperformancedoesnotguaranteefutureperformance