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:

Personality Style

Refers to individual differences in characteristic patterns of thinking, feeling, and behaving, often described in terms of traits or profiles.

Behavioral Changes

Alterations in the way an individual acts or behaves, which can be due to various internal or external factors.

Immune System

A complex network of cells, tissues, and organs that work together to defend the body against attacks by foreign invaders, such as bacteria, viruses, and other pathogens.

Pessimistic

A tendency to see the worst aspect of things or believe that the worst will happen; a lack of hope or confidence in the future.