A. Formulate Ho and Ha such that rejection of Ho leads to the conclusion that the load mutual funds have a higher mean annual return over the 5 year period. Ho:u(load)-u(no-load)_____0 Ha: u(load)-u(no-load)______0 B. Use the 60 mutual funds in the table above to conduct the hypothesis test. with is the p value: Pvalue = ____(To 4 decimals ) At a=.05 what is your conclusion?
Addition Rule of Probability
It simply refers to the likelihood of an event taking place whenever the occurrence of an event is uncertain. The probability of a single event can be calculated by dividing the number of successful trials of that event by the total number of trials.
Expected Value
When a large number of trials are performed for any random variable ‘X’, the predicted result is most likely the mean of all the outcomes for the random variable and it is known as expected value also known as expectation. The expected value, also known as the expectation, is denoted by: E(X).
Probability Distributions
Understanding probability is necessary to know the probability distributions. In statistics, probability is how the uncertainty of an event is measured. This event can be anything. The most common examples include tossing a coin, rolling a die, or choosing a card. Each of these events has multiple possibilities. Every such possibility is measured with the help of probability. To be more precise, the probability is used for calculating the occurrence of events that may or may not happen. Probability does not give sure results. Unless the probability of any event is 1, the different outcomes may or may not happen in real life, regardless of how less or how more their probability is.
Basic Probability
The simple definition of probability it is a chance of the occurrence of an event. It is defined in numerical form and the probability value is between 0 to 1. The probability value 0 indicates that there is no chance of that event occurring and the probability value 1 indicates that the event will occur. Sum of the probability value must be 1. The probability value is never a negative number. If it happens, then recheck the calculation.
10.2
Mutual funds are classified as load or no-load funds. Load funds require an investor to pay an initial fee based on a percentage of the amount invested in the fund. The no-load funds do not require this initial fee. Some financial advisors argue that the load mutual funds may be worth the extra fee because these funds provide a higher mean rate of return than the no-load mutual funds. A sample of 30 load mutual funds and a sample of 30 no-load mutual funds selected for analysis are contained in the Excel Online file below. Data were collected on the annual return for the funds over a five-year period. Construct a spreadsheet to answer the following questions.
A. Formulate Ho and Ha such that rejection of Ho leads to the conclusion that the load mutual funds have a higher mean annual return over the 5 year period.
Ho:u(load)-u(no-load)_____0
Ha: u(load)-u(no-load)______0
B. Use the 60 mutual funds in the table above to conduct the hypothesis test. with is the p value:
Pvalue = ____(To 4 decimals )
At a=.05 what is your conclusion?
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