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:

Rationalize

The process of justifying behaviors, decisions, or beliefs through seemingly logical or reasonable explanations, often to align them with one's own interests or values.

Economic Foundation

The base or underlying economic conditions and resources that support the growth, development, and sustainability of an economy or sector.

Society

A community organized around common traditions, institutions, or shared nationality.

Popular Culture

Encompasses the set of ideas, images, attitudes, and phenomena that permeate the everyday lives of a society, heavily influenced by mass media.