Question
We are studying mutual bond funds for the purpose of investing in several funds. For this particular study, we want to focus on the assets
We are studying mutual bond funds for the purpose of investing in several funds. For this particular study, we want to focus on the assets of a fund and its five-year performance. The question is: Can the five-year rate of return be estimated based on the assets of the fund? Nine mutual funds were selected at random, and their assets and rates of return are shown below.
Assets | Return | Assets | Return | ||||||||||||||
Fund | ($ millions) | (%) | Fund | ($ millions) | (%) | ||||||||||||
AARP High Quality Bond | $ | 622.2 | 10.8 | MFS Bond A | $ | 494.5 | 11.6 | ||||||||||
Babson Bond L | 160.4 | 11.3 | Nichols Income | 158.3 | 9.5 | ||||||||||||
Compass Capital Fixed Income | 275.7 | 11.4 | T. Rowe Price Short-term | 681.0 | 8.2 | ||||||||||||
Galaxy Bond Retail | 433.2 | 9.1 | Thompson Income B | 241.3 | 6.8 | ||||||||||||
Keystone Custodian B-1 | 437.9 | 9.2 | |||||||||||||||
Click here for the Excel Data File
State the decision rule for 0.05 significance level: H0: 0 H1: < 0 (Negative value should be indicated by a minus sign. Round your answer to 3 decimal places.)
Compute the value of the test statistic. (Negative value should be indicated by a minus sign. Round your answer to 3 decimal places.)
The regression equation is y=9.91980.00039xy^=9.9198-0.00039x , the sample size is 9, and the standard error of the slope is 0.0032. Use the 0.05 significance level. Can we conclude that the slope of the regression line is less than zero?
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