Rates of return on 24 mutual funds are shown. (a) Convert the data to ranks. Check the column sums ...

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     16.12 Rates of return on 24 mutual funds are shown. (a) Convert   the data to ranks. Check the column   sums. (b)   Calculate Spearman’s rank correlation coefficient. Show your calculations.   (c) At   α = .01 can   you reject the hypothesis of zero rank correlation? (d) Check your work by   using   MegaStat.   (e) Calculate the Pearson correlation coefficient (using Excel). (f ) In this   case, why   might either   test be used?     Rates of   Return on 24 Selected Mutual Funds (percent)   Fund        12-Mo.        5-Year         Fund      12-Mo.      5-Year     1               11.2              10.5           13             8.0           7.3     2            −2.4                5.0            14            11.2         14.2     3              8.6                  8.6              15          14.0            9.7     4              3.4                  3.7            16             11.6          14.7     5              3.9              −2.9            17            13.2         11.8     6             10.3               9.6            18           −1.0          2.3       7             16.1            14.1             19              6.2         10.5       8            6.7               6.2               20             21.1         9.0     9              6.5               7.4               21           −1.2           3.0    10            11.1            14.0             22              8.7           7.1    11              9.7                10.2           23              0.9           6.0    12            0.4                   9.3              24           12.7           10.0    

    • 8 years ago
    Critical value of the correlation coefficient at α = 0.01 is 0.515. Since 0.7424 > 0.515 ...
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      16.12Ratesofreturnon24mutualfundsareshown.xls