Question

Mutual funds mix different types of investments which alters performance. Use the tab titled BESTFUNDS1 to determine if there is a difference between the one-year and three-year annualized return for the 20 mutual funds shown in the file. (a) Identify which type of test is most appropriate for you to use, justify your answer. (b) Determine whether or not the mean return differs for the two investment horizons (use α = .05). (c) Make sure to interpret the results for real-world use (i.e., explain what the test allows you to conclude about the mutual funds).

Mutual Fund	One-Year return	Three-Year Return
Mutual Fund 1	3.4	5.5
Mutual Fund 2	3.5	4.5
Mutual Fund 3	2.6	5.0
Mutual Fund 4	4.0	7.8
Mutual Fund 5	5.7	6.3
Mutual Fund 6	3.0	7.9
Mutual Fund 7	4.4	6.8
Mutual Fund 8	5.3	7.4
Mutual Fund 9	4.2	6.5
Mutual Fund 10	2.6	4.8
Mutual Fund 11	14.8	21.3
Mutual Fund 12	18.7	21.3
Mutual Fund 13	14.4	20.3
Mutual Fund 14	12.2	22.6
Mutual Fund 15	5.0	9.0
Mutual Fund 16	23.1	12.7
Mutual Fund 17	7.5	9.2
Mutual Fund 18	8.0	9.5
Mutual Fund 19	11.4	11.8
Mutual Fund 20	5.1	12.3

Answer 1