You invest your life's savings in 5 different hedge fund companies, each of which invests your money in 10 different in-house funds. You realize that this type of investing is risky, but you want the maximum long-term growth rate. After one year, the results are as listed in the table. Are the hedge fund companies equally good, or are there statistically significant differences between them? 12 3 4 5 Company Average Return (%) 8.4 6.2 6.7 14.7 12.6 Standard Deviation (%) 2.5 5.3 1.3 2.5 5.8 SSE number (rtol=0.01, atol=0.0001) SSTT number (rtol=0.01, atol=0.0001) F number (rtol=0.01, atol=0.0001) Pval number (rtol=0.01, atol=0.0001) State your decision at significant level 0.1. O (a) Cannot Reject HO O (b) Reject HO

A First Course in Probability (10th Edition)
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Chapter1: Combinatorial Analysis
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You invest your life's savings in 5 different hedge fund companies, each of which invests your money in 10
different in-house funds. You realize that this type of investing is risky, but you want the maximum long-term
growth rate. After one year, the results are as listed in the table. Are the hedge fund companies equally good,
or are there statistically significant differences between them?
12 3 4
Company
Average Return (%) 8.4 6.2 6.7 14.7 12.6
Standard Deviation (%) 2.55.3 1.3 2.5 5.8
5
SSE number (rtol=0.01, atol=0.0001)
SSTT
number (rtol=0.01, atol=0.0001)
F
number (rtol=0.01, atol=0.0001)
Pval number (rtol=0.01, atol=0.0001)
State your decision at significant level 0.1.
O (a) Cannot Reject HO
O (b) Reject HO
Transcribed Image Text:You invest your life's savings in 5 different hedge fund companies, each of which invests your money in 10 different in-house funds. You realize that this type of investing is risky, but you want the maximum long-term growth rate. After one year, the results are as listed in the table. Are the hedge fund companies equally good, or are there statistically significant differences between them? 12 3 4 Company Average Return (%) 8.4 6.2 6.7 14.7 12.6 Standard Deviation (%) 2.55.3 1.3 2.5 5.8 5 SSE number (rtol=0.01, atol=0.0001) SSTT number (rtol=0.01, atol=0.0001) F number (rtol=0.01, atol=0.0001) Pval number (rtol=0.01, atol=0.0001) State your decision at significant level 0.1. O (a) Cannot Reject HO O (b) Reject HO
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