Question: Mutual-fund performance. Mutual funds often compare their performance with a benchmark provided by an "index" that describes the performance of the class of assets in which the fund invests. For example, the Vanguard International Growth Fund benchmarks its performance against the EAFE (Europe, Australasia, Far East) index. Table 17.4 gives annual returns (percent) for the fund and the index. Does the fund’s performance differ significantly from that of its benchmark?

(a) Explain clearly why the matched pairs t test is the proper choice to answer this question.

(b) Do a complete analysis that answers the question posed.