Discuss the below:
Pax World Balanced: x with line over it= 9.58%;s= 14.05%
Vanguard Balanced Index : x with line over it = 9.02%;s = 12.50%
These are the means and standard deviations of annualized percent returns.
A)Compute the coefficient of variation for each fund. If x (with line over it)represents return and s represents risk, then explain why the coefficient of variation can be taken to represent risk per unit of return.From this point of view, which fund appears to be better? Explain.
B)Compute a 75% Chebyshev interval around the mean for each fund. Use the intervals to compare the two funds. As usual, past performance does not guarantees future performance.