Investors commonly use the standard deviation of the monthly percentage return for a mutual fund as a measure of the risk for the fund; in such cases, a fund that has a larger standard deviation is...


Investors commonly use the standard deviation of the monthly percentage return for a mutual fund as a measure of the risk for the fund; in such cases, a fund that has a larger standard deviation is considered more risky than a fund with a lower standard deviation. The standard deviation for a certain fund, referred to as Fund A, and the standard deviation for a second fund, Fund B, were recently reported to be 15.0% and 19.2%, respectively. Assume that each of these standard deviations is based on a sample of 60 months of returns. Do the sample results support the conclusion that the Fund B has a larger population variance than Fund A? (Assume that ? = 0.05.)


test statistic is 1.6384
p-value = 0.0301



State your conclusion.


RejectH
0. We cannot conclude that the Fund B has a greater variance than Fund A.

Do not rejectH
0. We can conclude that the Fund B has a greater variance than Fund A.

 Do not rejectH
0. We cannot conclude that the Fund B has a greater variance than Fund A.

RejectH
0. We can conclude that the Fund B has a greater variance than Fund A.



Which fund is more risky?

The more risky fund is  ---Select--- Fund A or Fund B .


Jun 07, 2022
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