Over the Past 30 Years,the Sample Standard Deviations of the Rates

question 65

Multiple Choice

Over the past 30 years,the sample standard deviations of the rates of return for stock X and Stock Y were 0.20 and 0.12,respectively.The sample covariance between the returns of X and Y is 0.0096.When testing whether the correlation coefficient differs from zero,the value of the test statistic is t₂₈ = 2.31.At the 5% significance level,the critical value is t_0.025,28 = 2.048.The conclusion to the hypothesis test is to ___________.

• A) to reject H₀;we can conclude that the correlation coefficient differs from zero.
• B) to reject H₀;we cannot conclude that the correlation coefficient differs from zero.
• C) do not reject H₀;we can conclude that the correlation coefficient differs from zero.
• D) do not reject H₀;we cannot conclude that the correlation coefficient differs from zero.

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