Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly...

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Question

Suppose a mutual fund qualifies as having moderate risk if the standard deviation of its monthly...

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

4

%.

A mutual-fund rating agency randomly selects

22

months and determines the rate of return for a certain fund. The standard deviation of the rate of return is computed to be

3.43

%.

Is there sufficient evidence to conclude that the fund has moderate risk at the

alpha equals 0.01

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?

The null hypothesis is

H0:

▼

p

mu

sigma

▼

less than

not equals

greater than

equals

▼

0.0343.

0.04.

The alternative hypothesis is

H1:

▼

sigma

mu

p

▼

equals

greater than

not equals

less than

▼

0.04.

0.0343.

Calculate the value of the test statistic.

chi squared

equalsnothing

(Round to three decimal places as needed.)

Use technology to determine the P-value for the test statistic.

The P-value is

nothing

.

(Round to three decimal places as needed.)

What is the correct conclusion at the

alpha equals 0.01

level of significance?

Since the P-value is

▼

greater

less

than the level of significance,

▼

reject

do not reject

the null hypothesis. There

▼

is

is not

sufficient evidence to conclude that the fund has moderate risk at the

0.01

level of significance.

Enter your answer in each of the answer boxes.

math Statistics-And-Probability

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