FRM-Quants

anbu.edu
Finance Junkie
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FRM-Quants

Postby anbu.edu » Thu Mar 14, 2013 12:52 am

Robert Patterson, an options trader, believes that the return on options trading is higher on Mondays than on other days. In order to test his theory, he formulates a null hypothesis. Which of the following would be an appropriate null hypothesis? Returns on Mondays are:

A) not greater than returns on other days.
B) greater than returns on other days.
C) less than returns on other days.
D) not less than returns on other days.


if the ans is A ..why cant it be C. What is the difference between A and C

content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

FRM-Quants

Postby content.pristine » Thu Mar 14, 2013 7:44 pm

The Answer is A and not C.
Here to prove that mondays have higher returns, we need to focus on the returns of the other days. Also, the null hypothesis should contain an equal sign.


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