A Fund Manager Wants to Know If the Annual Rate

question 9

Multiple Choice

A fund manager wants to know if the annual rate of return is greater for growth stocks (sample 1) than for value stocks (sample 2) . The fund manager collects data on the returns of growth and value funds. Below are the sample sizes and rank sums for the Wilcoxon rank-sum test. Using the critical value approach and α = 0.01, the appropriate conclusion is ________.

• A) reject the null hypothesis; we can conclude the median return of growth stocks is greater than the median return of value stocks
• B) do not reject the null hypothesis; we cannot conclude the median return of growth stocks is greater than the median return of value stocks
• C) do not reject the null hypothesis; we can conclude the median return of growth stocks is greater than the median return of value stocks
• D) reject the null hypothesis; we cannot conclude the median return of growth stocks is greater than the median return of value stocks

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Definitions:

Cheques

Cheques are written orders to a bank to pay the specified amount from the drawer's account to the payee or their account.

Delay Times

Periods of waiting or postponement in processes or transactions, often affecting project timelines or service delivery.

Amounts

Quantitative measures or sums of items, whether in abstract numbers, quantities of material, or monetary values.

Net Present Value

Net Present Value is a method used in capital budgeting to assess the profitability of an investment, measuring the difference between the present value of cash inflows and outflows.