Investment Institutions Usually Have Funds with Different Risk Versus Reward

question 66

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 is 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. Using the critical value approach and α = 0.10, the appropriate conclusion is ________.

• A) to reject the null hypothesis; we cannot conclude the median difference of the returns is greater than zero
• B) do not reject the null hypothesis; we cannot conclude the median difference of the returns is greater than zero
• C) to reject the null hypothesis; we can conclude the median difference of the returns is greater than zero
• D) do not reject the null hypothesis; we can conclude the median difference of the returns is greater than zero

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Definitions:

Absolute Threshold

The minimum intensity of a stimulus that one can detect at least 50% of the time, which varies from one individual to another and for different senses.

Reliable Detection

The ability to consistently and accurately identify or recognize the presence of a specific condition, substance, or pattern.

Rare Condition

A health condition or disease that affects a small percentage of the population, often with limited research and treatment options.

Warning Signals

Indicators or alerts that signify potential danger or the need for caution.