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 = + Turnover + Expense + ,where Return is the average five-year return (in %),Turnover is the annual holdings turnover (in %),Expense is the annual expense ratio (in %),and is the random error component.A portion of the regression results is shown in the accompanying table. a.Predict the return for a mutual fund that has an annual holdings turnover of 60% and an annual expense ratio of 1.5%.
B)Interpret the slope coefficient attached to Expense.
C)Calculate the standard error of the estimate.If the sample mean for Return is 34.7%,what can you infer about the model's predictive power.
D)Calculate and interpret the coefficient of determination.

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 =  +  Turnover +  Expense +  ,where Return is the average five-year return (in %),Turnover is the annual holdings turnover (in %),Expense is the annual expense ratio (in %),and  is the random error component.A portion of the regression results is shown in the accompanying table.  a.Predict the return for a mutual fund that has an annual holdings turnover of 60% and an annual expense ratio of 1.5%.
B)Interpret the slope coefficient attached to Expense.
C)Calculate the standard error of the estimate.If the sample mean for Return is 34.7%,what can you infer about the model's predictive power.
D)Calculate and interpret the coefficient of determination.

Quizplus · Accepted Answer

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 =  +  Turnover +  Expense +  ,where Return is the average five-year return (in %),Turnover is the annual holdings turnover (in %),Expense is the annual expense ratio (in %),and  is the random error component.A portion of the regression results is shown in the accompanying table.  a.Predict the return for a mutual fund that has an annual holdings turnover of 60% and an annual expense ratio of 1.5%.
B)Interpret the slope coefficient attached to Expense.
C)Calculate the standard error of the estimate.If the sample mean for Return is 34.7%,what can you infer about the model's predictive power.
D)Calculate and interpret the coefficient of determination.

An Investment Analyst Wants to Examine the Relationship Between a Mutual