Investment Institutions Usually Have Funds with Different Risk Versus Reward

question 21

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. At the 10% significance level, the critical value is ________.

• A) 1.645
• B) 1.96
• C) 2.33
• D) 2.575

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Definitions:

Slope

A measure of the steepness or incline of a line, often represented as the ratio of the change in y over the change in x between two points on the line.

Line

A straight one-dimensional figure having no thickness and extending infinitely in both directions.

Slope-Intercept Form

A linear equation format, y = mx + b, where m is the slope and b is the y-intercept of the line, representing its steepness and position on the y-axis, respectively.

Slope-Intercept Form

An equation of the form y = mx + b, where m is the slope and b is the y-intercept of the line.