2. The logic of hypothesis testing Aa Aa A finance professor conducts a statisti

Question

2. The logic of hypothesis testing Aa Aa A finance professor conducts a statistical study to test his hunch that the mean return on common-stock portfolios is different with an active trading strategy than with a more passive buy-and-hold strategy Suppose the mean return is not affected by trading. However, when the professor collects a random sample, the sample mean difference is actually greater than zero. This result mistake in h that the professor made a is research does not mean means Suppose the professor collects a random sample and decides to conduct a hypothesis test. Formulate the null and alternative hypotheses. For each statement in the following table, click the correct radio button to indicate whether the statement is the null hypothesis, the alternative hypothesis, or neither. (Hint: This is a nondirectional hypothesis test.) Null Alternative Hypothesis Hypothesis Neither The mean return on common-stock portfolios is the same with a trading strategy as with a buy-and-hold strategy The mean return on common-stock portfolios is higher with a trading strategy than with a buy-and-hold strategy The mean return on common-stock portfolios is different with a trading strategy than with a buy-and-hold strategy The mean return on common-stock portfolios is lower with a trading strategy than with a buy-and-hold strategy

Explanation / Answer

(1) Null Hypothesis

(2) Alternate Hypothesis

(3) Alternate Hypothesis

(4) Alternate Hypothesis   

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