One Common Method of Evaluating the Performance of a Mutual

question 9

Essay

One common method of evaluating the performance of a mutual fund is to compare its returns to those of a recognized benchmark such as an index of the returns on all securities of the type that the fund accumulates. The Janus Worldwide Fund considers its benchmark to be the MSCI World IndexSM. The table below depicts the annual returns (percent) for a recent ten-year period. Is this fund a good investment? That is, does this fund significantly outperform its benchmark?

$\begin{array}{|c|r|r|}\hline &\text { Janus }&\text { MSCI } \\\text {Year }&\text { Worldwide } &\text { Index } \\\hline \mathbf{2 0 0 3} & 24.23 & 33.11 \\\hline \mathbf{2 0 0 4} & 5.53 & 14.72 \\\hline\mathbf{2 0 0 5} & 5.76 & 9.49 \\\hline \mathbf{2 0 0 6} & 17.84 & 20.07 \\\hline \mathbf{2 0 0 7} & 9.18 & 9.04 \\\hline \mathbf{2 0 0 8}& -45.04 & -40.71 \\\hline \mathbf{2 0 0 9} & 37.49 & 29.99 \\\hline \mathbf{2 0 1 0} & 17.00 & 11.76 \\\hline \mathbf{2 0 1 1} & -13.95 & -5.54 \\\hline \mathbf{2 0 1 2} & 19.64 & 15.83 \\\hline\end{array}$

-Explain clearly whether this data should be analyzed using a 2-sample t test approach or a match pairs t-test method.

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Definitions:

Lien

A claim registered against property, such as a mortgage; a charge giving the creditor the right to retain what is in her possession until her demands for payment are satisfied.

Specific Performance

An order by a court to a breaching party that it live up to the terms of an agreement.

Famous Painting

A widely recognized and highly valued piece of art, acknowledged for its historical, cultural, or aesthetic significance.

Medical Services

Professional health care services provided by doctors, nurses, and other health professionals to diagnose, treat, and prevent illness.