Investment Institutions Usually Have Funds with Different Risk Versus Reward

question 104

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. For the Wilcoxon signed-rank test for the matched-pairs, the competing hypotheses are ________.

• A) H₀: m_D = 0; H_A: m_D ≠ 0
• B) H₀: m_D ≤ 0; H_A: m_D > 0
• C) H₀: m_D ≠ 0; H_A: m_D = 0
• D) H₀: m_D ≥ 0; H_A: m_D < 0

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Definitions:

Ultimate Causes

Fundamental reasons behind biological or behavioral phenomena, often involving evolutionary explanations.

Natural Selection

The evolutionary process where organisms better adapted to their environment tend to survive and produce more offspring.

Human Intelligence

The capacity for logic, understanding, self-awareness, learning, emotional knowledge, reasoning, planning, creativity, and problem-solving.

Common Ancestry

The concept in evolutionary biology that different species share ancestors from which they have diverged over time.