Using the tab Entitled "Mutual Funds," perform the following operations.  This data is selected mutual funds from Morningstar Funds 500 in 2008.

1. Create dummy variables for Morningstar Rank and Fund Type.
2. Using Excel for your regression, develop an estimated regression equation to predict 5-year average return given fund type and net asset value.  State the estimated regression equation.
3. Using Excel for your regression, develop an estimated regression equation to predict 5-year average return given fund type, net asset value, expense ratio, and Morningstar Rank.  State the estimated regression equation.
4. Compare your output for these two regressions.  This should include comparing the significance of each of the coefficients as well as the significance and fit of the model as a whole.  Which model would you use to predict 5-year average return and why?

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