Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly rate of return is less than 6%. A mutual-fund rating agency randomly selects 23 months and determines the rate of return for a certain fund. The standard deviation of the rate of return is computed to be 4.42%. Is there sufficient evidence to conclude that the fund has moderate risk at the α=0.01 level of significance? A normal probability plot indicates that the monthly rates of return are normally distributed. Question content area bottom Part 1 What are the correct hypotheses for this test? The null hypothesis is H0: ▼ sigmaσ pp muμ ▼ not equals≠ greater than> less than< equals= ▼ 0.0442. 0.06. The alternative hypothesis is H1: ▼ sigmaσ muμ pp ▼ equals= greater than> less than< not equals≠ ▼ 0.0442. 0.06. Part 2 Calculate the value of the test statistic. χ2=enter your response here (Round to three decimal places as needed.) Part 3 Use technology to determine the P-value for the test statistic. The P-value is enter your response here. (Round to three decimal places as needed.) Part 4 What is the correct conclusion at the α=0.01 level of significance? Since the P-value is ▼ less greater than the level of significance, ▼ do not reject reject the null hypothesis. There ▼ is is not sufficient evidence to conclude that the fund has moderate risk at the 0.01 level of significance
Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly rate of return is less than 6%. A mutual-fund rating agency randomly selects 23 months and determines the rate of return for a certain fund. The standard deviation of the rate of return is computed to be 4.42%. Is there sufficient evidence to conclude that the fund has moderate risk at the α=0.01 level of significance? A normal probability plot indicates that the monthly rates of return are normally distributed.
Question content area bottom
Part 1
What are the correct hypotheses for this test?
The null hypothesis is H0:
▼
sigmaσ
pp
muμ
▼
not equals≠
greater than>
less than<
equals=
▼
0.0442.
0.06.
The alternative hypothesis is H1:
▼
sigmaσ
muμ
pp
▼
equals=
greater than>
less than<
not equals≠
▼
0.0442.
0.06.
Part 2
Calculate the value of the test statistic.
χ2=enter your response here (Round to three decimal places as needed.)
Part 3
Use technology to determine the P-value for the test statistic.
The P-value is enter your response here.
(Round to three decimal places as needed.)
Part 4
What is the correct conclusion at the α=0.01 level of significance?
Since the P-value is
▼
less
greater
than the level of significance,
▼
do not reject
reject
the null hypothesis. There
▼
is
is not
sufficient evidence to conclude that the fund has moderate risk at the 0.01 level of significance.
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