An investment advisory company studied funds available on the market: Large cap,

Question

An investment advisory company studied funds available on the market: Large cap, mid-cap, and small-cap. The company randomly selected some funds and measured their 1-year return rate (2011-2012) and 3-year return rate (2011-2014), respectively. Data is supplied in both Minitab and Excel format.

1. Investors believe that large-cap funds on average can achieve a 3-year return rate of 10% (or even higher). Your manager is doubtful of that belief. He asks you to analyze the data and let him know the results. He is also a statistician so he wants to see a full report (i.e., the five-step hypothesis testing procedure). Use ?=0.05.

2. Construct a 99% confidence interval for the mean 1-year return rate for Mid-cap funds. Present your steps. A Minitab report can be attached to your answer.

3. Some investors asked you whether they should invest in large-cap or small-cap funds for better average return (3-year return). Can you take a look at the data and tell the investors which type they should choose? Use significance level of 0.05, present your five-step procedure.

4. In discussing the market trend, an analyst suggests that the market has slowed down, i.e., the return rate has dropped. The analyst is adamant that the average 3-year return rate of small-cap funds is lower than their respective average 1-year return rate. Can you analyze the data to see if this judgment is true or not? Use ?=0.05 and present your five-step procedure.   

1YrReturn% Mid-Cap! 26.38 jyrReturn% Large | 3YrReturn% Large 3YrReturn% Mid-Cap 1YrReturn % Small | 3YrReturn % Small 28.99 33.40 33.98 19.47 16.23 24.26 16.25 15.65 15.26 17.59 16.27 6.94 14.96 14.94 14.90 16.47 16.24 15.02 14.97 14.61 17.41 13.30 14.23 12.45 12.39 14.32 16.74 10.46 15.23 18.62 22.45 15.66 13 15.69 13.48 10.39 10.85 13.22 13.07 12.90 15.69 14.62 26.06 15.72 10.88 16.38 11.33 23.24 10.46 19.73 16.43 13.50 12.67 12.63 12.52 11.29 13.49 13.31 13.26 13.24 12.35 7.28 12.90 12.99 12.40 12.36 12.23 15.36 17.33 10.90 10.86 10.83 10.68 10.67 10.62 16.40 18.28 10.34 15.08 15.96 14.92 11.50 11.28 12.94 12.92 22.02 16.63 13.08 10.83 31 12.69 12.60 16.75 10.25 16.04 18.36 10.90 9.82 12.26 10.54 12.03 10.54 9.94 10.43 10.35 11.72 16.99 20.50 15.46 10.07 10.06 17.93 11.52 9.92

Explanation / Answer

Minitab can import up to 4000 columns. The number of cells that Minitab can import is limited by your available memory address space. Excel *.xls files are limited to 65,536 rows and 256 columns. Excel *.xlsx files have much greater limits.

Note

If the Excel file contains multiple sheets, Minitab opens each sheet in a separate Minitab worksheet.

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