Mutual funds have become the increasing popular investment alternative to individual stocks for smaller investors. To help investors decide on particular fund to invest in, different publications regularly report average annual rate of return got by each of more than 100 mutual funds over 10 year period. Some publications also point to each fund's level of risk by categorising the historical variability of each fund's rate of return as high, intermediate, or low.
suppose you have $10,000 to invest and you have narrowed the final choice down to Fund A or Fund B. If annual (percentage) rates of return over 10 year period for two leading mutual funds are as given below, which fund would be your best choice for investment? How do you state best in this case? Explain your answer in detail. Carry out a thorough statistical analysis to back up statements.
Fund A -8.3 -6.2 20.9 -2.7 33.6 42.9 24.4 -5.2 -3.1 30.5
Fund B 12.1 0.8 6.4 12.2 27.8 15.3 18.2 10.7 1.3 11.4