Question
An investment fund manager claims that the average yearly return of their clients on their portfolio investment has increased during the past 5 years.
An investment fund manager claims that the average yearly return of their clients on their portfolio investment has increased during the past 5 years. Five years ago, the mean of yearly return of clients' portfolio investment was 13 percent. 102 investors among this year's clients were randomly selected and this sample showed the mean return to be 14.2 percent with a standard deviation of 6 percent. Assume that the distribution of portfolio investment return of this year's clients is the same as that of 5 years ago. a. Set up the hypotheses for fund manager's claim (write down the null and alternative hypothesis). b. Can we conclude at the 5% significance level that the fund manager's claim is true? Explain c. What is the p-value of the test you conducted in (b)?
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