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Investors commonly use the standard deviation of the monthly percentage return for a mutual fund as a measure of the risk for the fund. The
Investors commonly use the standard deviation of the monthly percentage return for a mutual fund as a measure of the risk for the fund. The standard deviation for the fund A and the standard deviation for the fund B were recently reported to be 20 and 15 respectively. Assume that each of these standard deviations is based on a sample of 12 months of returns. Do the sample results support the conclusion that the fund A is riskier than the fund B at a 5% level of significance. Use one-sided test.
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