Investment Institutions Usually Have Funds with Different Risk Versus Reward

question 12

Multiple Choice

Investment institutions usually have funds with different risk versus reward prospectuses. A trading magazine wants to determine if the returns of high-risk funds are greater than low-risk funds. The magazine records the return of high- and low-risk funds for a sample of 22 institutions. For the Wilcoxon signed-rank test, where D = high-risk return − low-risk return, the value of the test statistic is T = T⁺ = 185. Given the sample size, the sampling distribution of T can be approximated by the normal distribution as the sample size is greater than 10; T can be assumed to follow the normal distribution with mean and standard deviation ________, respectively.

• A) 126.5 and 30.80
• B) 30.80 and 126.5
• C) 125.5 and 948.75
• D) 30.80 and 984.75

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