A study analyzed the trading skills of investors. The study focused on \"round-t
ID: 3330074 • Letter: A
Question
A study analyzed the trading skills of investors. The study focused on "round-trip" trades, that is, trades in which the same stock was both bought and sold in the same quarter. Consider a random sample of 211 round-trip trades made by investors. Suppose the sample mean rate of return is 4.09% and the sample standard deviation is 8.52%. If the true mean rate of return of round-trip trades is positive, then the population of investors is considered to have performed successfully. Complete parts a through e below.
a. Specify the null and alternative hypotheses for determining whether the population of investors performed successfully.
A.
H0:=0
Ha: >0
B.
H0: =0
Ha:0
C.
H0:=0
Ha: <0
D.
H0: 0
Ha: =0
b. Find the rejection region for the test using
=0.05.
A.
z>1.96 or z<1.96
B.
z<1.96
C.
z>1.645
D.
z<1.645
E.
z>1.96
F.
z>1.645 or z<1.645
c. Interpret the value of
alphaequals=0.05
in the words of the problem.
A.
Do not reject the null hypothesis that the true mean rate of return of round-trip trades is zero if the p-value is less than the level of significance =0..05.
B.
Reject the null hypothesis that the true mean rate of return of round-trip trades is zero if the p-value is greater than the level of significance =0.05.
C.
Reject the null hypothesis that the true mean rate of return of round-trip trades is zero if the p-value is equal to the level of significance =0.05.
D.
Reject the null hypothesis that the true mean rate of return of round-trip trades is zero if the p-value is less than the level of significance =0.05.
d. A printout of the analysis is shown below. Locate the test statistic and p-value on the printout.
Test of mu = 0 vs > 0
95%
Lower
N
Mean
StDev
SE Mean
Bound
Z
P
211211
4.090
8.520
0.587
2.939
6.97
0.000
test
statistic=
p-value=
(Type integers or decimals.)
e. Give the appropriate conclusion in the words of the problem.
A.
Reject H0. There is insufficient evidence at the =0.05
level of significance to conclude that the true mean rate of return of round-trip trades is positive.
B.
Do not reject H0. There is sufficient evidence at the =0.05 level of significance to conclude that the true mean rate of return of round-trip trades is positive.
C.
Do not reject H0. There is insufficient evidence at the =0.05 level of significance to conclude that the true mean rate of return of round-trip trades is positive.
D.
Reject H0. There is sufficientevidence at the =0.05 level of significance to conclude that the true mean rate of return of round-trip trades is positive.
Test of mu = 0 vs > 0
Explanation / Answer
a) option A is correct
A.
H0:=0
Ha: >0
b)
option C is correct
C.
z>1.645
C)
D.
Reject the null hypothesis that the true mean rate of return of round-trip trades is zero if the p-value is less than the level of significance =0.05.
d)
test statistic=6.97
p value =0.0000
D.
Reject H0. There is sufficientevidence at the =0.05 level of significance to conclude that the true mean rate of return of round-trip trades is positive.
please revert for any clarification required,
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