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HWK 12 - of Load is greater than No load mutual funds The...

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Homework # 11 Problem # 40 on Page 443 Business Issue Rate of Return on Load or No-Load Mutual Funds Business Question "Do 'Load' mutual funds have a higher mean annual return over this 5 year period than 'No Load" funds?" Data A sample of 30 load 30 no load mutal funds Load No Load N1= 30 30 x1 = Err:509 Err:509 s1 = Err:509 Err:509 Analysis 1) Ho: t-Test: Two-Sample Assuming Unequal Variances Ha: Mu Load > Mu No Load Return Return Mean 16.23 15.7 2) Test Stat: Variance 12.39 10.99 t = ((x-barA-x-barB) - 0)/(sA2/nA + sB2/nB)^.5 Observatio 30 30 if Ho is true (uA = uB) and is t distributed Hypothesiz 0 with Df we can calculate df 58 t Stat 0.59 3) Alpha = .05 P(T<=t) one 0.28 t Critical on 1.67 4) Reject Ho if T > Tinv ( .1 , 58)= 1.67 P(T<=t) two 0.56 t Critical tw 2 5) T = 0.59 DF = 58 P-Value = Tdist (.59, 58, 1 ) = 0.28 6) Do Not Reject Ho Business Answer According to the samples taken of Load and No Load Mutual Funds there is inconclusive evidence to conclude that the mean return rate
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Unformatted text preview: of Load is greater than No load mutual funds. The sample shows that the Load mutual fund has a higher sample mean, however the the difference is not great enough to conclude the same for the population. B) The sample data could have been collected based on a different basis such as on a one, two, or three year periods or longer such as ten, fifteen, or twenty year periods to give better averages. Also more data could have been gathered to give a better indication about the true population. As for changing the method to use, it could have been paired data which would cause the test used to change. Also to take things back a little bit they could have just run two different tests on which one had the higher rate of return by using a regular t test for mean. Mu Load Mu No load ≤...
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