Morningstar Rank is a categorical variable. The data set contains only funds with four ranks (2-Star/3-Star/4-Star/5-Star).
Using the following dummy variables:
3Star-Rank = 1 for a 3-Star fund, 0 otherwise
4StarRank = 1 for a 4-Star fund, 0 otherwise and
5StarRank = 1 for a 5-Star fund, 0 otherwise
develop an estimated regression equation that can be used to predict the 5-year average return given the type of fund, the expense ratio, and the Morningstar Rank. Using alpha = 0.05, remove any independent variables that are not significant.