Q 95. Comparing investments Should you... [FREE SOLUTION]

91影视

The Practice of Statistics for AP

David Moore,Daren Starnes,Dan Yates

$Math Studyset 91影视 Explanations$ Math

4th Edition 路 809 pages

ISBN: 9781319113339

Chapter 1: Q 95. (page 71)

Comparing investments Should you put your money into a fund that buys stocks or a fund that invests in real estate? The boxplots compare the daily returns (in percent) on a 鈥渢otal stock market鈥� fund and a real estate fund over a year ending in November $2007$
(a) Read the graph: about what were the highest and lowest daily returns on the stock fund?
(b) Read the graph: the median return was about the same on both investments. About what was the median return?
(c) What is the most important difference between the two distributions?

Short Answer

Expert verified

Part (a) The highest and lowest daily returns are $- 3.5 %$ and $3 %$ respectively.

Part (b) The median return is about $0 %$

Part (c) The most difference is the spread.

Step by step solution

Part (a) Step 1: Given information

Given data :

Part (a) Step 2: Concept

A boxplot is a type of chart often used in explanatory data analysis.

Part (a) Step 3: Explanation

The left boxplot represents the stock fund. The end of the whisker on the bottom of the boxplot represents the lowest daily return, which is $- 3.5$ percent. The end of the whisker on the top of the boxplot represents the maximum daily return, which is $3 %$

Part (b) Step 1: Explanation

On both investments, the median return was nearly the same. The horizontal line within the box of the boxplot represents the median return, which is approximately $0 %$

Part (c) Step 1: Explanation

The spread is the most significant difference. Because the distance between the whiskers of the boxplots is much bigger for Stocks than for Real Estate, the spread for Stocks is much higher than the spread for Real Estate.