Investors not only desire a high return on their money hut t

Investors not only desire a high return on their money, hut they would also like the rate of return to be stable from month to month. An investment manager invests with the goal of reducing volatility (month-to-month fluctuations in the rate of return). The following data represent the rate of return (in percent) for his mutual fund for the past 12 months.

Solution

13.8

15.9

10.0

12.4

11.3

6.6

9.6

12.4

10.3

8.7

14.9

6.7

mean

11.05

standard deviation

2.97917011019085

confidence interval = mean +/- z-score * std/sqrt(n)

lower limit = 11.05 - 1.96 * 2.979/12 = 10.56

upper limit = 11.05 + 1.96 * 2.979/12 = 11.54

No, its doesnot validate

	13.8
	15.9
	10.0
	12.4
	11.3
	6.6
	9.6
	12.4
	10.3
	8.7
	14.9
	6.7
mean	11.05
standard deviation	2.97917011019085