Vanguard's Precious Metals and Mining fund (Metals) and Fidelity's Strategic Income fund (Income) were two top-performing mutuals funds for the years 2000 through 2009. An analysis of annual return data for these two funds provided important information for anytype of investor. Over the past 10 years, the Metals fund posted a mean return of 24.65% with a standard deviation of 37.13%. On the other hand, the mean and the standard deviation of return for the Income fund were 8.51% and 11.07%, repectively. It is reasonable to assume that the returns of the Metals and the Income funds are both normally distributed, where the means and the standard deviations are derived from the 10-year sample period. In a report, use the sample information to compare and contrast the Metals and Income funds from the perspective of an investor whose objective is to 1. Minimize the probability of earning a negative return. 2. Maximize the probability of earning a return b
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.
Vanguard's Precious Metals and Mining fund (Metals) and Fidelity's Strategic Income fund (Income) were two top-performing mutuals funds for the years 2000 through 2009. An analysis of annual return data for these two funds provided important information for anytype of investor. Over the past 10 years, the Metals fund posted a mean return of 24.65% with a standard deviation of 37.13%. On the other hand, the mean and the standard deviation of return for the Income fund were 8.51% and 11.07%, repectively. It is reasonable to assume that the returns of the Metals and the Income funds are both
In a report, use the sample information to compare and contrast the Metals and Income funds from the perspective of an investor whose objective is to
1. Minimize the probability of earning a negative return.
2. Maximize the probability of earning a return between 0% and 10%.
3. Maximize the probability of earning a return greater than 10%.
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