Investment institutions usually have funds with different risk versus reward prospectuses.A trading magazine wants to determine if the returns of high-risk funds is greater than low-risk funds.The magazine records the return of high- and low-risk funds for a sample of 22 institutions.For the Wilcoxon signed-rank test,where D = high-risk return - low-risk return,the value of the test statistic is T = T⁺= 185.Using the p-value approach and α = 0.10,the appropriate conclusion is _____. A) reject the null hypothesis;conclude the median difference of the returns is greater than zero B) reject the null hypothesis;we cannot conclude the median difference of the returns is greater than zero C) do not reject the null hypothesis;we cannot conclude the median difference of the returns is greater than zero D) do not reject the null hypothesis;conclude the median difference of the returns is greater than zero

Question

Quizplus · Accepted Answer

The p-value approach compares the p-value to the significance level (α) to make a decision. Here, α=0.10. Since the p-value is not provided in the question, we need to calculate it.
Using a two-tailed test, the critical value for n=22 at α=0.10 is 19 for the absolute value of T. The actual value of the test statistic, T=185, is greater than this critical value, meaning that we reject the null hypothesis.
Therefore, we conclude that the median difference of the returns is greater than zero. Answer choice A is the only one that matches this conclusion.

Investment Institutions Usually Have Funds with Different Risk Versus Reward