Investment Institutions Usually Have Funds with Different Risk Versus Reward

question 63

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) reject the null hypothesis;conclude the median difference of the returns is greater than zero
• B) 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;conclude the median difference of the returns is greater than zero

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Definitions:

Income Statement

A financial document summarizing a company's revenues, expenses, and profits over a specific period, usually a quarter or year.

Net Cash Provided

A financial metric that represents the amount of cash generated by a company's operating activities.

Indirect Method

A cash flow statement approach that starts with net income and adjusts for changes in balance sheet accounts to calculate the cash from operating activities.

Operating Activities

The primary revenue-producing activities of a business, involving transactions and events that affect net income.