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.

Describe the Shelter Principle and its application in the context of negotiable instruments.

Comprehend the concept of taking an instrument “for value” and how it applies to the HDC doctrine.

Understand the implications of the FTC rules established in the 1970s for protecting consumers against HDC abuses.

Recognize and distinguish between "real" and "personal" defenses available against claims made by holders or HDCs.

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Definitions:

Foreign Sovereign Immunities Act (FSIA)

A United States law that sets the limitations as to whether a foreign sovereign nation (and its political subdivisions, agencies, and instrumentalities) can be sued in U.S. courts—judicial and legislative.

Antitrust Liability

Legal responsibility for engaging in practices that restrain trade, reduce competition, or create monopolies, violating antitrust laws.

Relevant Geographic Markets

The area in which a company competes for customers for its products or services, important in assessing competition and regulatory compliance.

Merger

The combination of two or more companies into a single entity, often to increase competitive advantage or market share.