6. Paired annual rates of return data are collected from 8 randomly selected investment funds before...

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6. Paired annual rates of return data are collected from 8randomly selected investment funds before and after The FederalReserve cuts down interest rates. The dataset and relevant summeryresults are given in the table below. Suppose you are a financialanalyst interested in finding out whether investment fundsâ€™ meanrate of return is significantly different before and after theinterest rate adjustment.
Fund
Before (%)
After (%)
After-Before (%)
1
3.51
4.62
1.11
2
4.25
4.31
0.06
3
1.76
1.52
-0.24
4
2.68
2.69
0.01
5
3.19
3.77
0.58
6
5.43
4.86
-0.57
7
2.18
3.69
1.51
8
6.72
7.98
1.26
Average=
3.72
4.18
0.47
Standard Deviation=
1.68
1.88
0.76
The ALTURNATIVE hypothesis of this test is____________________________.
The significance level for this test should be chosen to be_.
The numerical formula calculating test statistic is____________________.
The test statistic is calculated tobe_.
The p-value is _.
Based on the p-value we ___, (accept or rejectH0)

Answer & Explanation Solved by verified expert

4.4 Ratings (622 Votes)

SolutionState the hypotheses The first step is tostate the null hypothesis and an alternative hypothesisNull hypothesis ud 0Alternative hypothesis ud 0Note that these hypotheses constitute a twotailed test Thenull hypothesis will be rejected if See Answer

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Fund	Before (%)	After (%)	After-Before (%)
1	3.51	4.62	1.11
2	4.25	4.31	0.06
3	1.76	1.52	-0.24
4	2.68	2.69	0.01
5	3.19	3.77	0.58
6	5.43	4.86	-0.57
7	2.18	3.69	1.51
8	6.72	7.98	1.26
Average=	3.72	4.18	0.47
Standard Deviation=	1.68	1.88	0.76