A Financial Analyst Examines the Performance of Two Mutual Funds

question 10

Multiple Choice

A financial analyst examines the performance of two mutual funds and claims that the variances of the annual returns for the bond funds differ.To support his claim,he collects data on the annual returns (in percent) for the years 2001 through 2010.The analyst assumes that the annual returns for the two emerging market bond funds are normally distributed.Use the following summary statistics. For the competing hypotheses which of the following is the correct approximation of the p-value?

• A) Less than 0.01
• B) Between 0.01 and 0.025
• C) Between 0.02 and 0.05
• D) Between 0.05 and 0.10

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Definitions:

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance.

Diseconomies of Scale

The phenomenon where production cost per unit increases as the scale of output increases, usually due to factors like increased complexity and inefficiencies.

Long-run Average Total Cost

The per unit cost of production when all inputs, including capital, are variable, typically depicting economies and diseconomies of scale.

Marginal Cost

The additional cost resulting from the creation of one more unit of a product or service.