Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Year Stivers Trippi Year 1 $10,600 $5,600 Year 2 $11,700 $6,300 Year 3 $12,700 $7,000 Year 4 $14,000 $7,600 Year 5 $15,000 $8,600 Year 6 $16,100 $9,200 Year 7 $17,200 $9,900 Year 8 $18,400 $10,700
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
Suppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below.
|
Year |
Stivers |
Trippi |
|
Year 1 |
$10,600 |
$5,600 |
|
Year 2 |
$11,700 |
$6,300 |
|
Year 3 |
$12,700 |
$7,000 |
|
Year 4 |
$14,000 |
$7,600 |
|
Year 5 |
$15,000 |
$8,600 |
|
Year 6 |
$16,100 |
$9,200 |
|
Year 7 |
$17,200 |
$9,900 |
|
Year 8 |
$18,400 |
$10,700 |
Compute the mean annual return for the Stivers mutual fund and for the Trippi mutual fund. Do not round intermediate calculations.
|
Stivers |
Trippi |
|||
|
Mean annual return (to 3 decimals) |
|
|
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