Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Finance Theory And Policy

Authors: Steven Michael Suranovic

1st Edition

193612646X, 9781936126460

More Books

Students also viewed these Finance questions