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Question 31  (1 mark)

What is the 95% confidence interval for the population proportion of fund managers who are overweight in bank shares if 33 of fund managers are overweighted out of a sample of

150 fund managers?

A     17.17% to 26.83%

B      16.42% to 27.58%

C      16.26% to 27.74%

D     15.37% to 28.63%

Question 32  (1 mark)

A type I error is always made when:

A     the null hypothesis is rejected when it is true

B      the null hypothesis is not rejected when it is false

C      the research hypothesis is rejected when it is true

D     the research hypothesis is not rejected when it is false

Question 33  (1 mark)

What would be the general decision rule for a two-tailed test?

A     Do not reject H0 if: lower test statistics < critical value < upper critical value

B      Do not reject H0 if: lower critical value < test statistics < upper critical value

C      Do not reject H0 if: critical value < test statistics

D     Do not reject H0 if: test statistics < upper critical value

Question 34  (1 mark)

What would be the most accurate null and alternative hypothesis to determine whether the average monthly stock returns (µ) are significantly different from zero at 5% level of significant?

A      H₀ : µ ≥ 0; H₁ : µ <0

B      H₀ : µ ≠ 0; H₁ : µ =0

C      H₀ : µ = 0; H₁ : µ ≠ 0

D      H₀ : µ ≤ 0; H₁ : µ >0

Question 35  (1 mark)

The calculated test statistic and critical value are 1.85 and 1.96 respectively for the null and alternative hypothesis which is defined as H₀ : µ ≤ 0; H₁ : µ >0 . The null hypothesis of H₀ : µ ≤0 ;

A     can be rejected because test statistics < critical value.

B      cannot be rejected because test statistics < critical value.

C      can be rejected because null hypothesis is testing µ ≤0 .

D