Which of the given funds has the closer relationship

Reference no: EM131764026

Question: Statistics for investing (3.1) 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 = 0.77 with the S&P 500 index and that Fidelity Real Estate Fund has correlation r = 0.37 with the index.

(a) Which of these funds has the closer relationship to returns from the stock market as a whole? How do you know?

(b) Does the information given tell Joe anything about which fund has had higher returns?

Reference no: EM131764026

Questions Cloud

Accessible population in the researcher : The researcher has identified all first-year students at the researcher's institution, has determined his desired sample size, and has listed.

What is the probability that scores differ by more points : Loser buys the pizza Leona and Fred are friendly competitors in high school. Both are about to take the ACT college entrance examination.

What role does european union play in employment relations : HRMT20029 - Compare and contrast the role that the state plays in the system of employment relations in France with the role that the state plays in the system

Collecting data for a school district : A researcher is collecting data for a school district that is interested in the effectiveness of a district-provided Head Start program.

Which of the given funds has the closer relationship : Statistics for investing (3.1) Joe's retirement plan invests in stocks through an "index fund" that follows the behavior of the stock market as a whole.

Discuss corporation when the market rate of interest : Barnwell Corp. purchased 15, $ 1,000,4% bonds of Power Source Corporation when the market rate of interest

Complete the task of exporting its goods or services : Conduct a research project based on an analysis of the way a selected Saudi company goes about the task of exporting its goods or services.

What is the population she is interested in : A Mountain Peak University instructor is interested in the average number of days Mountain Peak University science students are absent from class during.

What are the possible values of the stock : What are the possible values of the stock after two days, and what is the probability for each value? What is the probability that the stock is worth more.

User Account

All Pages