The following table lists the annual returns (in percent) over a 10-year period

Question

The following table lists the annual returns (in percent) over a 10-year period for ING Russia, a top- performing mutual fund. Use Table 6 ear 2000 2001 2002 2003 2004 Return -17.80 80.32 24.72 75.88 5.91 ear 2005 2006 2007 2008 2009 70.94 67.52 30.69 -71.51 129.97 SOURCE: www.finance.yahoo.com er he a. Specify the competing hypotheses to determine whether the median return differs from 8% b. At the 10% significance level, what is the decision rule? Do not assume the normal approximation for T Reject Ho, if T TL-10 or if T2 Ty® 45 O Reject Ho, if T> TL = 10 and if T

Explanation / Answer

a) Correct answer: Option (A)
b) Correct answer: Option (A)
c)

From the given data

T = Min (41,14) = 14

Answer: Test statistic T = 14

d) Correct answer: option (D)

S.No. Samples(X) x-8 |X-8| Rank Ri Positive Rank Negative Rank 1 -17.8 -25.8 25.8 4 4 2 80.32 72.32 72.32 8 8 3 24.72 16.72 16.72 2 2 4 75.88 67.88 67.88 7 7 5 5.91 -2.09 2.09 1 1 6 70.98 62.98 62.98 6 6 7 67.52 59.52 59.52 5 5 8 30.69 22.69 22.69 3 3 9 -71.51 -79.51 79.51 9 9 10 129.97 121.97 121.97 10 10 Total: 41 14

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