Many mutual funds compare their performance with that of a benchmark, an index of the

profiletutor4helpyou
 (Not rated)
 (Not rated)
Chat

Many mutual funds compare their performance with that of a benchmark, an index of the returns on all securities of the kind that the fund buys. The Vanguard International Growth Fund, for example, takes as its benchmark the Morgan Stanley Europe, Australasia, Far East (EAFE) index of overseas stock market performance. Here are the percent returns for the funds and for the EAFE from 1982 (the first full year of the fund’s existence) to 2000:

 

Year

Fund

EAFE

Year

Fund

EAFE

1982

5.27

-0.86

1992

-5.79

-11.85

1983

43.08

24.61

1993

44.74

32.94

1984

-1.02

7.86

1994

0.76

8.06

1985

56.94

56.72

1995

14.89

11.55

1986

56.71

69.94

1996

14.65

6.36

1987

12.48

24.93

1997

4.12

2.06

1988

11.61

28.59

1998

16.93

20.33

1989

24.76

10.8

1999

26.34

27.3

1990

-12.05

-23.2

2000

-8.6

-13.96

1991

4.74

12.5

   

 

Make a scatterplot suitable for predicting fund returns from EAFE returns. Is there a clear straight-line pattern? How strong is this pattern? (Give a numerical measure.) Are there any extreme outliers from the straight-line pattern?

 

 

 

  • 8 years ago
Many mutual funds compare their performance with that of a benchmark, an index of the
NOT RATED

Purchase the answer to view it

blurred-text
  • attachment
    solution.docx