Relationship to returns from the stock market

Assignment Help Basic Statistics
Reference no: EM131031505

Problem: Joe's retirement plan invests in stocks through an "index fund" that follows the behavior of the stock market as a whole, as measured by the Standard & Poor's (S&P) 500 stock index. Joe wants to buy a mutual fund that does not track the index closely. He reads that monthly returns from Fidelity Technology Fund have correlation r= 077. with the S&P 500 index and that Fidelity Real Estate Fund has correlation r= 0.37 with the index. Which of the following is correct?

Required:

(i) The Fidelity Technology Fund has a closer relationship to returns from the stock market as a whole and also has higher returns than the Fidelity Real Estate Fund.

(ii) The Fidelity Technology Fund has a closer relationship to returns from the stock market as a whole, but we cannot say that it has higher returns than the Fidelity Real Estate Fund.

(iii) The Fidelity Real Estate Fund has a closer relationship to returns from the stock market as a whole and also has higher returns than the Fidelity Technology Fund.

(iv) The Fidelity Real Estate Fund has a closer relationship to returns from the stock market as a whole, but we cannot say that it has higher returns than the Fidelity Technology Fund.

Reference no: EM131031505

Questions Cloud

Determine the weight difference between the two in a month : Consider two identical 80-kg men who are eating identical meals and doing identical things except that one of them jogs for 30 min every day while the other watches TV. Determine the weight difference between the two in a month
Probability of getting four of a kind : You read in a book on poker that if you hold a pair (two cards of the same rank) in your hand, the probability of getting four of a kind is 2/245.
Estimate the correlation : From the scatterplot of monkey call response against pure-tone response in Figure 7.6 what would you estimate the correlation r to be?
Project management is defined as temporary endeavor : Project management is defined as temporary endeavor undertaken to meet project plan expound
Relationship to returns from the stock market : The Fidelity Technology Fund has a closer relationship to returns from the stock market as a whole and also has higher returns than the Fidelity Real Estate Fund.
Which of the following is an extension to pert/cpm : Which of the following is an extension to PERT/CPM? a) CERT b) FMEA
Determine how much heat is transferred to the egg : Taking the properties of the egg to be p=1020 kg/m3 and cp 3.32 kJ/kg · °C, determine how much heat is transferred to the egg by the time the average temperature of the egg rises to 80°C.
The employee payroll project : Need 30 quiz questions with answers based on the employee payroll project made in MICROSOFT PROJECT.
What is project management : What is project management and explain the meaning of a plan and various constraints in a projects

Reviews

Write a Review

Basic Statistics Questions & Answers

  Problem regarding the service times independent

The service times are independent and Exp(8)-distributed. Let Tk be the time from 9:05 until service has been completed for k of the two customers, k = 1, 2. Find E Tk for k = 1 and 2.

  If in 2020 the actual number of parrots observed turns out

in 2009 the number of feral quaker parrots living in austin was 250. in 1992 there wereonly 15 feral quaker parrots.

  Proportion defective for the piston manufacturing process

What is an estimate of the proportion defective for the piston manufacturing process when it is control?

  General without the axiom of choice

(which cannot be proved in general without the axiom of choice, to be treated in §1.5). Hint: Let B be a countably infinite subset of X \Y . Then B and B ∪ Y have the same cardinality.

  Hypothesis testing and experimental study

How does hypothesis testing contribute to the scientific knowledge base? What is one example of a null hypothesis statement?

  When constructing and implementing hypothesis tests what

a group of researchers studied the effect of global environmental change on grazing lands. their article reported the

  Calculate fugacity coefficient of methane equimolar mixture

Consider a mixture of CH4 and H2S at 444 K and 70 bar. Calculate the fugacity coefficient of methane in an equimolar mixture using each of the following the van der Waals equation of state.

  Autumn 2000 exam

Data on the rates of return for two different stocks, were collected over a fifty year period. The rate of return is defined as, the increase in value of the portfolio (including any dividends or other distributions) during the year, divided by it..

  Potato chips from factory following normal distribution

Suppose that weights of bags of potato chips coming from a factory follow a normal distribution with mean 12.8 ounces and standard deviation .6 ounces.

  Determining lowest weight a student

Determine the lowest weight a student can have and still be qualified to enter the school.

  What is the probability that the reported match is a true

a witness testifies that there are about 10 million men who could have been the perpetrator of a particular heinous

  Determine sample size to use for survey

From past estimates, manager thinks that about 4% of customers have expressed dissatisfaction. What sample size must you use for this survey?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd