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Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly rate of return is less than 3 % . A mutual-fund rating agency randomly selects 25 months and determines the rate of return for a certain fund. The standard deviation of the rate of return is computed to be 2.03 %. Is there sufficient evidence to conclude that the fund has moderate risk at the α=0.10 level of significance? A normal probability plot indicates that the monthly rates of return are normally distributed.

What are the correct hypotheses for this test?


Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly rate of return is less than


math   Statistics-And-Probability   
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Answer Date: 30/07/2020 To test the hypothesis is that the fund has moderate risk at 10% level of significance. The null andChi-square Variance Test 9.000000 hypothesized variance 4.120900 observed variance of Sample 25 n 24 df 10.989 chi-square 010

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