Investment in an income annuity

Reference no: EM13981710

1. Explain when you would use the Mann-Whitney test, when you would use the two-sample t test, and when you would use the Wald-Wolfowitz test. Discuss your reasons for choosing each test in the appropriate situation.

2. An article in Money compares investment in an income annuity, offered by insurance companies, and a mix of low-cost mutual funds.6 Suppose the following data are annualized returns (in percent) randomly sampled from these two kinds of investments.

Income Annuity: 9, 7.5, 8.3, 6.2, 9.1, 6.8, 7.9, 8.8

Mutual Funds Mix: 10, 10.5, 11.0, 8.9, 12.1, 10.3, 9.1, 9.7

Test to determine which investment mode, if either, is better than the other.

Reference no: EM13981710

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