Answer: 5%.

The second quartile (or 50th percentile) is calculated using the formula for the position of a percentile in an array sorted in ascending order: \( L_y = (n + 1) \times \frac{y}{100} \), where \( y \) is the percentile. For seven entries, the location of the second quartile is \( L_y = (7 + 1) \times \frac{50}{100} = 4 \). When the returns are sorted in ascending order (3%, 3%, 4%, 5%, 7%, 8%, 12%), the return of the 4th fund is 5%. Alternatively, the second quartile is the median, which for an odd-numbered sample is the value at the \( \frac{n + 1}{2} \) position, confirming the median return as 5%.

Author: LeetQuiz Editorial Team