A Financial Analyst Examines the Performance of Two Mutual Funds

question 9

Multiple Choice

A financial analyst examines the performance of two mutual funds and claims that the variances of the annual returns for the bond funds differ. To support his claim, he collects data on the annual returns (in percent) for the years 2001 through 2010. The analyst assumes that the annual returns for the two emerging market bond funds are normally distributed. Use the following summary statistics. For the competing hypotheses Η₀: / = 1, Η_A: / ≠ 1, which of the following is the correct approximation of the p-value?

• A) Less than 0.01
• B) Between 0.01 and 0.025
• C) Between 0.02 and 0.05
• D) Between 0.05 and 0.10

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Definitions:

Burden of Proof

The obligation to prove one's assertion or allegation, often referring to the responsibility placed on one party in a legal case to prove or disprove a disputed fact.

Insanity Case

A legal term used to describe a defendant's incapacity to understand the wrongful nature of their actions due to mental illness at the time of a crime.

Paranoid Schizophrenia

A subtype of schizophrenia characterized by prominent delusions of persecution or grandeur.

Insanity Defense

A legal defense used in court to argue that the defendant was unable to understand the nature of their actions or distinguish right from wrong due to mental illness at the time of the crime.