A Financial Analyst Examines the Performance of Two Mutual Funds

question 99

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. The competing hypotheses are Which of the following is the critical F value at the 10% significance level?

• A) F_{0.10, (9,9)}= 2.44
• B) F_{0.05, (10,10)}= 2.98
• C) F_{0.05, (9,9)} = 3.18
• D) F_{0.10, (10,10)}= 2.32

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Definitions:

Long-Term Borrowing

Debt obtained by a company for a period exceeding one year, typically used for financing more substantial investments or projects.