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:

Glands

Organs in the body that secrete hormones or other substances directly into the blood or onto a body surface.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column, transmitting neural signals between the brain and the rest of the body.

Reflexes

Automatic, involuntary responses to specific stimuli, such as the knee-jerk reaction, that are mediated by the nervous system.

Sensory Information

Data received by the senses (sight, hearing, touch, taste, and smell) that is then processed by the brain to understand and interact with the environment.