Investment Institutions Usually Have Funds with Different Risk Versus Reward

Multiple Choice

Investment institutions usually have funds with different risk versus reward prospectuses. A trading magazine wants to determine if the returns of high-risk funds is greater than low-risk funds. The magazine records the return of high- and low-risk funds for a sample of 22 institutions. For the Wilcoxon signed-rank test, where D = high-risk return − low-risk return, the value of the test statistic is T = T⁺ = 185. Using the p-value approach and α = 0.10, the appropriate conclusion is ________.

A) to reject the null hypothesis; we can conclude the median difference of the returns is greater than zero
B) to reject the null hypothesis; we cannot conclude the median difference of the returns is greater than zero
C) do not reject the null hypothesis; we cannot conclude the median difference of the returns is greater than zero
D) do not reject the null hypothesis; we can conclude the median difference of the returns is greater than zero