11_15_11ans

# 11_15_11ans - STAT 409 1. Fall 2011 Examples for 11/15/2011...

This preview shows pages 1–3. Sign up to view the full content.

STAT 409 Examples for 11/15/2011 Fall 2011 1. An investment analyst wants to test whether differences exist between the returns on two mutual funds. Paired data of annualized rates of return for the two mutual funds during 15 randomly chosen months are as follows. Month Fund A return (%) Fund B return (%) A – B 1 12 14 – 2 2 11 15 – 4 3 14 16 – 2 4 10 9 1 5 12 10 2 6 8 8 0 7 16 18 – 2 8 13 12 1 9 12 17 – 5 10 10 13 – 3 11 6 10 – 4 12 9 12 – 3 13 16 15 1 14 13 19 – 6 15 10 14 – 4 a) Conduct a sign test for determining whether or not returns on the two mutual funds are equal. Use α = 0.05. H 0 : m A = m B vs. H 1 : m A m B 2 – tailed. 4 positive differences out of 14 (non-zero). p-value = 2 × P ( Y 4 ), where Y has a Binomial distribution with n = 14, p = 0.50 = 2 × 0.0898 = 0.1796 . p-value > α Do NOT Reject H 0 .

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
b) Conduct a signed rank test for determining whether or not returns on the two mutual funds are equal. Use α = 0.05. H
This is the end of the preview. Sign up to access the rest of the document.

## 11_15_11ans - STAT 409 1. Fall 2011 Examples for 11/15/2011...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online