A mutual fund manager claims that at least 70% of the stocks she selects will increase in
Question:
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 results at least as extreme as we observed if p = 0.7, so it’s reasonable to conclude that the fund manager is correct.
d) There’s a 3% chance that a random sample could produce results at least as extreme as we observed if p = 0.7, 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.
StocksStocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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Business Statistics
ISBN: 9780133899122
3rd Canadian Edition
Authors: Norean D. Sharpe, Richard D. De Veaux, Paul F. Velleman, David Wright
