28. Mutual funds. A mutual fund manager claims that at least 70% of the stocks she selects...
Question:
28. Mutual funds. A mutual fund manager claims that at least 70% of the stocks she selects will increase in price over the next year. We examined a sample of 200 of her selections over the past three years. Our P-value turns out to be 0.03. Test an appropriate hypothesis. Which conclusion is appropriate? Explain.
a) There’s a 3% chance that the fund manager is correct.
b) There’s a 97% chance that the fund manager is correct.
c) There’s a 3% chance that a random sample could produce the results we observed, so it’s reasonable to conclude that the fund manager is correct.
d) There’s a 3% chance that a random sample could produce the results we observed if so it’s reasonable to conclude that the fund manager is not correct.
e) There’s a 3% chance that the null hypothesis is correct.
Step by Step Answer:
Business Statistics
ISBN: 9780321716095
2nd Edition
Authors: Norean D. Sharpe, Paul F. Velleman, David Bock, Norean Radke Sharpe