Statistics for Business & Economics, Revised (MindTap Course List)
12th Edition
ISBN: 9781285846323
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
Publisher: South-Western College Pub
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Textbook Question
Chapter 2.3, Problem 34E
Refer to the data in Table 2.12.
- a. Prepare a crosstabulation with 5-Year Average Return as the columns and Net Asset Value as the rows. Use classes starting with 0 in increments of 5 for 5-Year Average Return and classes starting at 0 with increments of 10 for Net Asset Value.
- b. Comment on the relationship, if any, between the variables.
TABLE 2.12 FINANCIAL DATA FOR A SAMPLE OF 45 MUTUAL FUNDS
| Fund Name | Fund Type | Net Asset Value ($) | 5-Year Average Return (%) | Expense Ratio (%) | Morningstar Rank |
| Amer Cent Inc & Growth Inv | DE | 28.88 | 12.39 | 0.67 | 2-Star |
| American Century Intl. Disc | IE | 14.37 | 30.53 | 1.41 | 3-Star |
| American Century Tax-Free Bond | FI | 10.73 | 3.34 | 0.49 | 4-Star |
| American Century Ultra | DE | 24.94 | 10.88 | 0.99 | 3-Star |
| Ariel | DE | 46.39 | 11.32 | 1.03 | 2-Star |
| Artisan Intl Val | IE | 25.52 | 24.95 | 1.23 | 3-Star |
| Artisan Small Cap | DE | 16.92 | 15.67 | 1.18 | 3-Star |
| Baron Asset | DE | 50.67 | 16.77 | 1.31 | 5-Star |
| Brandywine | DE | 36.58 | 18.14 | 1.08 | 4-Star |
| Brown Cap Small | DE | 35.73 | 15.85 | 1.20 | 4-Star |
| Buffalo Mid Cap | DE | 15.29 | 17.25 | 1.02 | 3-Star |
| Delafield | DE | 24.32 | 17.77 | 1.32 | 4-Star |
| DFA U.S. Micro Cap | DE | 13.47 | 17.23 | 0.53 | 3-Star |
| Dodge & Cox Income | FI | 12.51 | 4.31 | 0.44 | 4-Star |
| Fairholme | DE | 31.86 | 18.23 | 1.00 | 5-Star |
| Fidelity Contrafund | DE | 73.11 | 17.99 | 0.89 | 5-Star |
| Fidelity Municipal Income | FI | 12.58 | 4.41 | 0.45 | 5-Star |
| Fidelity Overseas | IE | 48.39 | 23.46 | 0.90 | 4-Star |
| Fidelity Sel Electronics | DE | 45.60 | 13.50 | 0.89 | 3-Star |
| Fidelity Sh-Term Bond | FI | 8.60 | 2.76 | 0.45 | 3-Star |
| Fidelity | DE | 39.85 | 14.40 | 0.56 | 4-Star |
| FPA New Income | FI | 10.95 | 4.63 | 0.62 | 3-Star |
| Gabelli Asset AAA | DE | 49.81 | 16.70 | 1.36 | 4-Star |
| Greenspring | DE | 23.59 | 12.46 | 1.07 | 3-Star |
| Janus | DE | 32.26 | 12.81 | 0.90 | 3-Star |
| Janus Worldwide | IE | 54.83 | 12.31 | 0.86 | 2-Star |
| Kalmar Gr Val Sm Cp | DE | 15.30 | 15.31 | 1.32 | 3-Star |
| Managers Freemont Bond | FI | 10.56 | 5.14 | 0.60 | 5-Star |
| Marsico 21st Century | DE | 17.44 | 15.16 | 1.31 | 5-Star |
| Mathews Pacific Tiger | IE | 27.86 | 32.70 | 1.16 | 3-Star |
| Meridan Value | DE | 31.92 | 15.33 | 1.08 | 4-Star |
| Oakmark I | DE | 40.37 | 9.51 | 1.05 | 2-Star |
| PIMCO Emerg Mkts Bd D | FI | 10.68 | 13.57 | 1.25 | 3-Star |
| RS Value A | DE | 26.27 | 23.68 | 1.36 | 4-Star |
| T. Rowe Price Latin Am. | IE | 53.89 | 51.10 | 1.24 | 4-Star |
| T. Rowe Price Mid Val | DE | 22.46 | 16.91 | 0.80 | 4-Star |
| Templeton Growth A | IE | 24.07 | 15.91 | 1.01 | 3-Star |
| Thornburg Value A | DE | 37.53 | 15.46 | 1.27 | 4-Star |
| USAA Income | FI | 12.10 | 4.31 | 0.62 | 3-Star |
| Vanguard Equity-Inc | DE | 24.42 | 13.41 | 0.29 | 4-Star |
| Vanguard Global Equity | IE | 23.71 | 21.77 | 0.64 | 5-Star |
| Vanguard GNMA | FI | 10.37 | 4.25 | 0.21 | 5-Star |
| Vanguard Sht-Tm TE | FI | 15.68 | 2.37 | 0.16 | 3-Star |
| Vanguard Sm Cp Idx | DE | 32.58 | 17.01 | 0.23 | 3-Star |
| Wasatch Sm Cp Growth | DE | 35.41 | 13.98 | 1.19 | 4-Star |
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Students have asked these similar questions
1. Explain, why doesn’t an estimated absolute covariance number tell the investor much about the relationship between the returns on the two assets?
The following table reports a portion of the annual returns (in percent) for these two funds from 2000–2016.
Data for Case Study 3.2 Returns (in percent) for Janus Funds
Year Balanced Overseas
2000-2.16-18.57
2001-5.04-23.11
2002-6.56-23.89
2003-13.74-36.79
2004-8.71-18.58
2005-7.75-32.39
2006-10.56-47.21
2007-10.15-27.76
2008-15.22-52.75
2009-24.28-78.12
2010-7.83-19.28
2011-1.44-32.78
2012-13.07-12.42
2013-19.72-12.1
2014-8.46-13.72
2015-0.60-8.55
2016-4.51-6.91
In a report, use the sample information to
1. Calculate measures of central location to describe the similarities and the differences in these two funds’ returns.
2. Calculate measures of dispersion to assess the risk of each fund.
3. Calculate and interpret measures of correlation between the two funds.
Bartman Industries' and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 2015-2020. The Winslow 5000 data are adjusted to include dividends.
Data as given in the problem are shown below:
Bartman Industries
Reynolds Inc.
Winslow 5000
Year
Stock Price
Dividend
Holding period return
Stock Price
Dividend
Holding period return
Includes Divs.
Holding period return
2020
$17.25
$1.15
24.75%
$48.75
$3.00
-1.05%
11,663.98
32.76%
2019
14.75
1.06
-4.18%
52.30
2.90
13.23%
8,785.70
1.22%
2018
16.50
1.00
62.79%
48.75
2.75
-10.04%
8,679.98
34.91%
2017
10.75
0.95
2.90%
57.25
2.50
-0.42%
6,434.03
14.85%
2016
11.37
0.90
61.02%
60.00
2.25
11.66%
5,602.28
19.05%
2015
7.62
55.75
4,705.97
Assume the risk-free rate on long-term Treasury bonds is 6.04%. Assume also that the average annual return on the Winslow 5000 is 11% as the expected return on the market. Use the SML equation (i.e., CAPM) to…
Chapter 2 Solutions
Statistics for Business & Economics, Revised (MindTap Course List)
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