Mutual funds cut-off
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The quarterly returns for a group of 54 mutual funds with a mean of 4.1% and a standard deviation of 5.3% can be modeled by a Normal model. Based on the model N(0.041, 0.053), what are the cutoff values for the highest 30% of these funds?
* It notes that the z value is between 0-1, and says using technology to determine the actual z-value, rounding to two decimal places z=0.52.
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Solution Summary
From a group of mutual fund, cut-off value for highest 30% of the funds is estimated.
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For given data,
mean, X = 0.041
standard deviation, s = 0.053
number of funds, n = 54
cut-off value, x = ?
highest 30% funds == 0.30
The problem can be formulated as follows:
probability,
p = P((x-X) > ...
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