The Following Data for Five Years of the Annual Returns

question 32

Multiple Choice

The following data for five years of the annual returns for two of Vanguard's mutual funds,the Vanguard Energy Fund (x) and the Vanguard Healthcare Fund (y) ,were given as s_x = 35.77,s_y = 13.34,s_xy = 447.68.The competing hypotheses are .At the 5% significance level which of the following is the correct conclusion to the test?

• A) Reject H₀ and conclude that the returns of these two mutual funds are correlated.
• B) Reject H₀ and conclude that the returns of these two mutual funds are not correlated.
• C) Do not reject and conclude that the returns of these two mutual funds are not correlated.
• D) Do not reject and conclude that the returns of these two mutual funds are correlated.

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Definitions:

Common Stock

A form of investment that signifies part ownership in a firm, granting the owner the right to vote and a portion of the corporation's earnings via dividends.

Land

An asset category in accounting, representing the earth's surface owned by an individual or entity, not depreciated over time.

Cash Flows

Represents the movement of money into and out of a business or financial entity, indicating its liquidity, financial health and ability to generate cash.

Operating Activities

Activities related to the primary revenue-generating operations of a company, often involving the production and delivery of goods and services.