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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