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ADM 2304 – ASSIGNMENT 3

ADM 2304 – ASSIGNMENT 3

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Author: Christine Farr
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ADM 2304 – ASSIGNMENT 3Due Date: Thursday, November 13, 2014 at 11:59 pm.Instructions:1.Please submit a single file in pdf format to Blackboard. Zip files are not accepted.2.You may use Minitab or other software for any calculations. However, you must do manualcalculations when asked. You may paste your output onto your assignment; however, thisoutput does not replace any of the steps outlined below.3.If you are performing a hypothesis test, make sure you state the hypotheses, the level ofsignificance, the decision rule in terms of the critical value, the test statistic or p-value,your decision (whether to reject or not to reject the null hypothesis), and your conclusion inmanagerial terms. All tests should be done using the .05 level of significance.4.The Minitab datasets can also be found in the Excel file Assign3Data.5.Remember to include your integrity statement.Question 1 (Equity Mutual Funds) [ 15 marks ]The file EquityFundReturns.mtw gives the one-year returns on three classes of equity mutual funds:Canadian Equity, U.S. Equity and International Equity.(a)(b)(c)(d)(e)(f)Graph the data using boxplots on a common scale and discuss whether the modelassumptions appear to be valid.Calculate the sample mean and sample standard deviation for each sample. Then use thesample standard deviations to calculate the pooled variance manually. Check to see if yourpooled variance agrees with the MSE from Minitab.Test whether there is a difference in the average 1-year returns among the three classes ofequity mutual funds.Plot the residuals versus the fits and again discuss whether the model assumptions appear tobe valid.Use the Bonferroni method to calculate confidence intervals for all the pairwise differencesbetween the one-year returns. Use the 95% confidence level for the set of three intervals.What do you conclude regarding the nature of the differences between the different types ofmutual funds?Use the Kruskal-Wallis nonparametric test to determine whether there is a difference in themedian 1-year returns among the three classes of equity mutual funds.

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