Investment Institutions Usually Have Funds with Different Risk Versus Reward

question 48

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 p-value approach and α = 0.10, the appropriate conclusion is ________.

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

---

Definitions:

Seasonal Affective Disorder

A type of depression that occurs at a certain time of the year, usually during winter when there is less natural sunlight.

Phototherapy

A treatment method that involves exposure to specific wavelengths of light to treat conditions like jaundice in newborns or certain skin disorders.

High-Carbohydrate Diet

A dietary plan focusing on foods high in carbohydrates, such as grains, fruits, and vegetables, often used for energy or athletic performance.

Circadian Rhythm

The natural, internal process that regulates the sleep-wake cycle and repeats roughly every 24 hours.