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 funds’ 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)
