A Financial Analyst Examines the Performance of Two Mutual Funds

question 60

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 At α = 0.10,is the analyst's claim supported by the data using the critical value approach?

• A) No,because the value of the test statistic is less than the critical F value.
• B) Yes,because the value of the test statistic is less than the critical F value.
• C) Yes,because the value of the test statistic is greater than the critical F value.
• D) No,because the value of the test statistic is greater than the critical F value.

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Definitions:

Cost Recovery Deduction

A tax deduction that allows taxpayers to recover the cost of property or assets over time through depreciation or amortization.

§179 Expense

A section of the U.S. tax code that allows businesses to deduct the full purchase price of qualifying equipment and/or software within a tax year.

Machinery

Mechanical devices or equipment designed to perform a specific task in industrial, commercial, or agricultural applications.

§179 Expense

A tax code allowing businesses to deduct the full purchase price of qualifying equipment or software within the tax year of purchase.