An analyst conducts a hypothesis test to check whether the mean return for a particular fund differs from 10%.He assumes that returns are normally distributed and sets up the following competing hypotheses: H_o:μ = 10,H_A:μ ≠ 10 Over the past 10 years the fund has had an average annual return of 13.4% with a standard deviation of 2.6%.The value of the test statistic is 4.14 and the critical values at the 5% significance level are−2.262 and 2.262.The correct decision is to ____________________________________. A) reject H_o;we can conclude that the mean differs from 10% B) reject H_o;we cannot conclude that the mean differs from 10% C) not reject H_o;we can conclude that the mean differs from 10% D) not reject H_o;we cannot conclude that the mean differs from 10%

Question

Quizplus · Accepted Answer

The calculated test statistic (4.14) is greater than the critical value at the 5% significance level (2.262), which means we reject the null hypothesis. Therefore, we can conclude that the mean return for the fund differs from 10%.

An Analyst Conducts a Hypothesis Test to Check Whether the Mean