Conclude that the fund has moderate risk

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Reference no: EM131720206

Suppose a mutual fund is considered moderate risk if the standard deviation of the monthly rate is less than 3%. A mutual fund rating agency randomly selects 22 months and determines the rate of return for a certain fund. The standard deviation of the rate of return for the sample is computed to be 2.4%. Assuming the distribution of the monthly rates is normally distributed, is there sufficient evidence to conclude that the fund has moderate risk? Use the P-value approach with α = 0.01?

Reference no: EM131720206

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