Solution-Compute the correlation coefficient

Compute the correlation coefficient

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Reference no: EM13991957

Compute the correlation coefficient "by hand". You may use excel to do the hand computations. In other words you may use excel to sum up the column compute the squares of each column, etc. You may hand write this and upload an image of your handwritten work. Answer any question in a word document. Mutual fund performance. Many mutual fund 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 it benchmark the Morgan Stanley stock market performance. Here are the percent returns for the fund 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	69.74	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	10.80	1999	26.34	27.30
1990	-12.05	-23.20	2000	-8.60	13.96
1991	4.74	12.50

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?

Reference no: EM13991957

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Compute the correlation coefficient : Compute the correlation coefficient "by hand". You may use excel to do the hand computations. In other words you may use excel to sum up the column compute the squares of each column, etc

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Compute the correlation coefficient

Reference no: EM13991957

Reference no: EM13991957

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