Question

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 each cell (by country and by fund type) Two-way ANOVA: return versus Fund, Country Source DF MS FundType Country Interaction 3 27.042 9.0139 1.58 0.268 Error Total 3 266.342 88.7806 15.61 0.001 169.514 69.5139 1.22 0.088 8 45.5115.6889 15 408.409 S-2.385 R-Sq- 88.86% R-Sq (adj) -79.11. Individual 95% CI, For Mean Based on Pooled StDev Fund Mean Grouping mf 16.0000 mt2 9.6625 m£4 9.5000 mt3 4.5000 Choose the best Answer for the recommendation O Investors who want higher average returns should prefer funds from Asia vs the West O Investors who want higher average returns should prefer fund Type 3 rather than the other types O Investors who want higher average returns should prefer funds from Type 2 and 4 rather than the other types Investors who want higher average returns should not pay more for funds from Asia vs the West Both C and D are correct

Answer 1

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

mf 1 and 3 are significant.

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

since,the interaction has p-value =0.268, that means interaction  is not significant

so, answer is option D)