Solution) The Fidelity Overseas mutual fund consists of about equal proportions of Japanese and European stock


Question: The Fidelity Overseas mutual fund consists of about equal proportions of Japanese and European stocks. The percentage of the fund invested in any individual country varies according to prevailing rates of return on stocks in different countries. At the end of October 1995, the fund manager was considering the possibility of shifting the proportions invested in French, Dutch, and Italian stocks. This change would be made if it could be statistically substantiated that differences in average annualized rates of return during the period ending in October existed among stocks from the three countries. Random samples of 50 French stocks, 32 Dutch stocks, and 28 Italian stocks were collected, and the annualized rate of return for each stock over the period under study was computed. Then an analysis of variance was carried out, which produced the following results: SSE = 22,399.8 and TSS (total sum of squares) = 32,156. 1. Based on these results, should the manager shift the proportions of the fund invested in the three countries? How confident are you of your answer? Construct a complete ANOVA table for this problem.

Price: $2.99
Solution: The solution consists of 2 pages
Type of Deliverable: Word Document

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