An Analyst Conducts a Hypothesis Test to Check Whether the Mean

question 100

Multiple Choice

An analyst conducts a hypothesis test to check whether the mean return for a particular fund differs from 10%.He assumes that returns are normally distributed and sets up the following competing hypotheses: H_o:μ = 10,H_A:μ ≠ 10 Over the past 10 years the fund has had an average annual return of 13.4% with a standard deviation of 2.6%.The value of the test statistic is 4.14 and the critical values at the 5% significance level are−2.262 and 2.262.The correct decision is to ____________________________________.

• A) reject H_o;we can conclude that the mean differs from 10%
• B) reject H_o;we cannot conclude that the mean differs from 10%
• C) not reject H_o;we can conclude that the mean differs from 10%
• D) not reject H_o;we cannot conclude that the mean differs from 10%

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Definitions:

Naturalistic Observation

A research method involving the systematic study of behavior in its natural context, without intervention by the observer.

Objective Data

Information that is measurable, observable, and can be verified by another person, independent of the individual who is observing or measuring it.

Applied Research

Focuses on practical application of scientific knowledge to solve real-world problems.

Social Psychology

The subfield that attempts to explain how the actual, imagined, or implied presence of others influences the thoughts, feelings, and behavior of individuals.