A Researcher Wants to Check the Claim That Convicted Burglars $\bar{x}$

question 28

Multiple Choice

A researcher wants to check the claim that convicted burglars spend an average of 18.7 months in jail. She takes a random sample of 35 such cases from court files and finds that $\bar{x}$ = 16.7 months. Assume that the population standard deviation is 7 months. Test the null hypothesis that µ = 18.7 at the 0.05 significance level.

• A) Do not reject the null hypothesis and conclude that the claim that the mean is different from 18.7 months is supported.
• B) Do not reject the null hypothesis and conclude that the claim that the mean is different from 18.7 months cannot be supported.
• C) Reject the null hypothesis and conclude that the claim that the mean is different from 18.7 months is supported.
• D) Reject the null hypothesis and conclude that the claim that the mean is different from 18.7 months cannot be supported.

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Definitions:

Market Portfolio

A theoretical bundle of investments that includes every type of asset available in the market, with each asset weighted by its total market value.

Sharpe Measure

A method used to evaluate the risk-adjusted return of an investment, comparing the excess return (over a risk-free rate) to the standard deviation of returns.

S&P 500 Index

A stock market index in the United States composed of the market values of 500 major companies listed on either the New York Stock Exchange or NASDAQ.

Time-Weighted Return

A method of calculating investment returns that eliminates the impact of cash flows into and out of the portfolio, focusing solely on the performance of the investments themselves.