Q1. Which one of the following is the most appropriate set of hypotheses to use when a researcher is trying to demonstrate that a return is greater than the risk-free rate? The null hypothesis is framed as a:

A)   less than statement and the alternative hypothesis is framed as a greater than or equal to statement.

B)   less than or equal to statement and the alternative hypothesis is framed as a greater than statement.

C)   greater than statement and the alternative hypothesis is framed as a less than or equal to statement.

 

Q2. Which one of the following best characterizes the alternative hypothesis? The alternative hypothesis is usually the:

A)   hypothesis to be proved through statistical testing.

B)   hoped-for outcome.

C)   hypothesis that is accepted after a statistical test is conducted.

 

Q3. What is the most common formulation of null and alternative hypotheses?

A)   Equal to for the null and not equal to for the alternative.

B)   Less than for the null and greater than for the alternative.

C)   Greater than or equal to for the null and less than for the alternative.

 

Q4. Jill Woodall believes that the average return on equity in the retail industry, μ, is less than 15%. What is null (H₀) and alternative (H_a) hypothesis for her study?

A)   H₀: μ < 0.15 versus H_a: μ = 0.15.

B)   H₀: μ = 0.15 versus H_a: μ ≠ 0.15.

C)   H₀: μ ≥ 0.15 versus H_a: μ < 0.15.

 

Q5. James Ambercrombie believes that the average return on equity in the utility industry, μ, is greater than 10%. What is null (H₀) and alternative (H_a) hypothesis for his study?

A)   H₀: μ = 0.10 versus H_a: μ ≠ 0.10.

B)   H₀: μ ≤ 0.10 versus H_a: μ > 0.10.

C)   H₀: μ ≥ 0.10 versus H_a: μ < 0.10.