XYZ Investment company invests clients' money across 200 different investment portfolios, each of which has been structured and managed by a specialist portfolio manager. Mr Jack Nelsen, the Director of XYZ Investment suspects that a significant difference exists between the returns on portfolios managed by male portfolio managers and those managed by female portfolio managers.

Mr Jack Nelsen decided to conduct an empirical study to determine whether the returns on portfolios differ significantly according to the gender on the portfolio manager. 120 portfolio managers were chosen for this study and they completed a questionnaire which included a demographic information sheet on gender, age, educational level and job tenure. The average annual returns of the portfolio managed by each of the 120 portfolio managers were objectively measured using data from the database of XYZ Investment.

The SPSS output after data analysis is provided below:

Table 1. Group Statistic table

Gender N Mean Std. Deviation Std. Error Mean

Portfolio Return Male 65 11.23% 2.79% 0.34%

Female 55 15.56% 3.93% 0.53%

Table 2. Mann-Whitney test table

Gender N Mean Rank Sum of Ranks

Portfolio Return Male 65 43.53 2873

Female 55 81.24 4387

Total 120

Table 3. Test Statistic table

Portfolio Return

Mann-Whitney 662

Wilcoxon W 2873

Z -5.929

Asymp. Sig 0.000

(2- tailed)

Required:

(a) Elaborate on the methodology adopted for the above study. [5 marks]

(b) Identify the independent and dependent variables in Mr Jack's study. [5 marks]

(c) Formulate the null and alternative hypotheses of Mr Jack's study. [5 marks]

(d) Provide an interpretation of the output in Tables 1-3. [20 marks]