1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nostrana [21]
2 years ago
15

There are 10,000 mutual fund managers. 22 claim that they are the best, since their fund beat the relevant index every year for

7 years. However, you think that markets are efficient and that the average fund manager is as likely to deliver a better performance than the index as to underperform the index, before fees.
Part 1 | Attempt 1/10 for 10 pts. What is the probability that the average single fund managers beats the index 7 years in a row (before fees)? 4+ decimals
Part 2 | Attempt 1/10 for 10 pts. How many fund managers would you expect to beat the index 7 years in a row if only luck and no skill was involved? No decimals
Mathematics
1 answer:
QveST [7]2 years ago
5 0

Answer:

Part A:

Probability that average single manager beat the index= (0.5)^7=0.0078125=0.0078 (4\ decimals)

Part B:

Fund Managers to beat index 7 years=78.125≅78 managers.

Step-by-step explanation:

Part A:

Given data:

Since there are equal chances for delivering equal better performance and of under performance so

Probability of better performance =0.5

Required:

Probability that the average single fund managers beats the index 7 years in a row (before fees)=?

Solution:

Since there is 7 year index:

Probability that average single manager beat the index= (0.5)^7=0.0078125=0.0078 (4\ decimals)

Part B:

Given Data:

Number of mutual fund managers=10,000

Probability that average single manager beat the index= 0.0078125 (Calculated in part A)

Required:

How many fund managers would you expect to beat the index 7 years in a row if only luck and no skill was involved?

Solution:

Fund Managers to beat index 7 years=Total number of managers*probability  average single member beat the index

Fund Managers to beat index 7 years=10,000*0.0078125

Fund Managers to beat index 7 years=78.125≅78 managers.

You might be interested in
A quality control expert at LIFE batteries wants to test their new batteries. The design engineer claims they have a variance of
emmainna [20.7K]

Answer:

z = \frac{981.7 -997}{\frac{62}{\sqrt{73}}}= -2.108

And we can use the normal standard distribution table or excel and with the complement ruler we got:

P(z>-2.108) =1- P(z

Step-by-step explanation:

We know the following info given:

\mu = 997 represent the true mean

\sigma = \sqrt{3844}= 62 represent the population deviation

n = 73 represent the sample size selected

Since the sample size is large enough (n>30) we can use the central limit theorem and the sample mean would have the following distribution:

\bar X \sim N (\mu, \frac{\sigma}{\sqrt{n}})

And for this case we want to find this probability:

P(\bar X >981.7)

And we can use the z score formula given by:

z= \frac{\bar X -\mu}{\frac{\sigma}{\sqrt{n}}}

And replacing we got:

z = \frac{981.7 -997}{\frac{62}{\sqrt{73}}}= -2.108

And we can use the normal standard distribution table or excel and with the complement ruler we got:

P(z>-2.108) =1- P(z

3 0
3 years ago
Helpppp plssssss helpppppppppp
galina1969 [7]
Both are similar, so Yes.

-All the sides of the squares are equal

-The triangles are also the same, just one is smaller. The one on the right is 2/3 of the one on the left.
8 0
2 years ago
Simplify the expression.
user100 [1]
Ur answer is. 5 y^2+4y+14 because I went through it in class
6 0
3 years ago
What is the average rate of change of the function f(x) = x^2 on the interval from x=2 to x=4?
Ghella [55]
The answer is c
Step by step:
7 0
3 years ago
Select the equation that contains the points,  (−6,  5 2 ) (-6, 52)
Molodets [167]
In any case.  if  the x values (-6) are the same for both points the equation of line would be x = -6
8 0
2 years ago
Other questions:
  • In the diagram below, BC is an altitude of ABD. To the nearest whole unit, what is the length of CD?
    6·2 answers
  • A rectangle has a length of 9.00 inches and a width of 4.25 inches. What us the area in square inches? Round to the correct sign
    11·1 answer
  • On a trip to Sacramento, Shawna traveled 400 miles in 8 hours. The next time she made the same trip, it took 10 hours. How much
    5·1 answer
  • Anna gets $10 dollars everyday but on sunday on sunday she gets $17 dollars she wants to buy a dress that is 2,000 dollars if sh
    7·1 answer
  • I need help someone
    13·1 answer
  • Which equation shows that you can find the power of a power by finding the product of the exponents? A.(wc)d = wc + wd B. (wc)d
    8·2 answers
  • -4.66666666667 as a fraction
    14·1 answer
  • The yard behind the Cindy’s house is rectangular in shape and has a perimeter of 72 feet. If the length l of the yard is 18 feet
    8·2 answers
  • Please help!!!
    9·1 answer
  • Can Someone Help? Im already failing Math Badly
    7·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!