# A portfolio manager claims that the mean annual return on one of the mutual funds he manages

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## Question:

A portfolio manager claims that the mean annual return on one of the mutual funds he manages exceeds 8%. To substantiate his claim, he states that over the past 10 years, the mean annual return for the mutual fund has been 9.5% with a sample standard deviation of 1.5%. Assume annual returns are normally distributed.

a. Specify the competing hypotheses to test the portfolio manager's claim.

b. Calculate the value of the test statistic.

c. At the 5% significance level, use the p-value approach to determine if the portfolio manager's claim substantiated by the data.

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