Question

Problem 3 The following are results of study examining average annual returns for 4 different types of mutual funds. Each fund type has funds comprised of companies headquartered in Asia and funds comprised of companies headquartered in the West. There are 2 observations in country and by fund type) Two-way ANOVA: return versus Fund, Country each cell (by DF MS Source FundType Country Interaction 3 27.042 9.0139 1.58 0.268 Error Total 3266.342, 88.7806 15.61 0.001 1 69.514 69.5139 1.22 0.088 8 45.511 5.6889 15 408.409 S.-2.385 R-Sq-88.868 R-Sqtadj) -79.11 Individual 951-Cis For Mean Based on Pooled StDev Fund Mean Grouping mfl 16.0000 A mf2 9.6625 mf4 9.5000 m£3 4.5000 Choose the best recommendation for mutual fund returns O Investors who want higher returns should prefer mutual funds in West vs Asia O Investors who want higher returns should prefer mutual Fund3 over all others O Investors who want the higher returns should prefer fund type 1 of the others Both A and C are correct.

Answer 1

mutual fund 2 and 4 are not significant , because they share same letter B.

also,the mean return for mutual fund 1 is higher than mutual fund 3,i.e 16>4.5. so, investors should prefer type 1

so, option c) is correct