Suppose a mutual fund qualifies is having moderate risk if the standard deviatio
ID: 3160650 • Letter: S
Question
Suppose a mutual fund qualifies is having moderate risk if the standard deviation of its monthly rate of return is less than 5%. A mutual fund rating agency randomly selects 29 months and determine the rate of return for a certain find The standard deviation of the rate of return is completed to be 4.72%. Is there sufficient evidence to conclude that the fund has moderate risk at the alpha = 0.10 level of significance? A normal probability plot indicates that the monthly rates of return are normally distributed What are the correct hypothesis for this test? The null hypothesis is H_0: The alternative hypothesis is H_1: Calculate the value of the test statistic. chi_0^2 = (Round to two decimal places as needed) Use technology to determine the p-value for the test statistic The P-value is (Round to three decimal places as needed.) What is the correct conclusion at the a = 0.10 level of significance? Since the P-value is than the level of significance the null hypoExplanation / Answer
Formulating the null and alternative hypotheses,
Ho: sigma >= 0.05
Ha: sigma < 0.05 [ANSWER]
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Getting the test statistic, as
s = sample standard deviation = 0.0472
sigmao = hypothesized standard deviation = 0.05
n = sample size = 29
Thus, chi^2 = (N - 1)(s/sigmao)^2 = 24.951808 [ANSWER, TEST STATISTIC]
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As we can see, this is a left tailed test.
As
df = N - 1 = 28
Hence, by technology,
Pvalue = 0.369542847 [ANSWER]
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As P > 0.10, we fail to reject Ho. Hence,
For the last sentence:
1. GREATER
2. FAIL TO REJECT
3. IS NO [ANSWERS]
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