Regression equation using assets as independent variable

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Reference no: EM1319671

Q1) We are studying mutual funds for purpose of investing in several funds. For this particular study, we want to focus on assets of fund and its 5-years performance.

Question is: Can five-year rate of return be evaluated based on assets of fund? Nine funds were selected at random, and their assets and rates of return are shown below.

Fund	Assets ($ Million)	Return(%)	Fund	Assets ($ Million)	Return(%)
AARP High quality bond	622.2	10.8	MFS Bond A	494.5	11.6
Babson Bond L	160.4	11.3	Nichols Income	158.3	9.5
Compass capital Fixed income	275.7	11.4	T. Rowe Price short-term	681.0	8.2
Galaxy Bond Retail	433.2	9.1	Thompson income B	241.3	6.8
Keystone Custodian B-1	437.9	9.2

i) Sketch a scatter diagram.

ii) Compute coefficient of correlation.

iii) Compute coefficient of determination.

iv) Write a brief report of your findings for parts b and c.

v) Determine regression equation. Use assets as independent variables.

vi) For fund with $400.0 million in sales, determineut five-year rate of return (in percent).

Reference no: EM1319671

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