An investment analyst wants to examine the relationship between a mutual fund's return, its turnover rate, and its expense ratio. She randomly selects 10 mutual funds and estimates: Return = β₀ + β₁Turnover + β₂Expense + ε, where Return is the average five-year return (in %), Turnover is the annual holdings turnover (in %), Expense is the annual expense ratio (in %), and ε is the random error component. A portion of the regression results is shown in the accompanying table. a. At the 10% significance level, are the explanatory variables jointly significant in explaining Return? Explain.
B) At the 10% significance level, is each explanatory variable individually significant in explaining Return? Explain.

Question

An investment analyst wants to examine the relationship between a mutual fund's return, its turnover rate, and its expense ratio. She randomly selects 10 mutual funds and estimates: Return = β₀ + β₁Turnover + β₂Expense + ε, where Return is the average five-year return (in %), Turnover is the annual holdings turnover (in %), Expense is the annual expense ratio (in %), and ε is the random error component. A portion of the regression results is shown in the accompanying table.

a. At the 10% significance level, are the explanatory variables jointly significant in explaining Return? Explain.
B) At the 10% significance level, is each explanatory variable individually significant in explaining Return? Explain.

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The Answer of An investment analyst wants to examine the relationship between a mutual fund's return, its turnover rate, and its expense ratio. She randomly selects 10 mutual funds and estimates: Return = β₀ + β₁Turnover + β₂Expense + ε, where Return is the average five-year return (in %), Turnover is the annual holdings turnover (in %), Expense is the annual expense ratio (in %), and ε is the random error component. A portion of the regression results is shown in the accompanying table. a. At the 10% significance level, are the explanatory variables jointly significant in explaining Return? Explain. B) At the 10% significance level, is each explanatory variable individually significant in explaining Return? Explain.

An Investment Analyst Wants to Examine the Relationship Between a Mutual