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:

Clotting

The process by which blood changes from a liquid to a solid state, forming a clot to prevent excessive bleeding when vessels are injured.

Capillary Bed

A network of small blood vessels known as capillaries, which facilitate the exchange of oxygen, nutrients, and waste materials between the blood and tissues.

Vena Cava

A large vein carrying deoxygenated blood into the heart, consisting of two main branches, the superior and inferior vena cava.

Arteriole Branch

A small branch of an artery leading into capillaries, responsible for regulating blood flow from arteries to capillaries.