Question

Your investment executive claims that the average yearly rate of return on the stocks she recommends is at least 12.0%. You plan on taking a sample to test against her claim. The correct alternative hypotheses is Mu<=12% Mu>12% Mu>=12% Mu<12%

Answer 1

The correct alternative hypothesis is Mu<12%. Option D is answer.

Step-by-step explanation:

The null hypothesis is the statement that is currently assumed to be true until there is evidence to disprove it. In this case, the null hypothesis is that the average yearly rate of return on the stocks recommended by the investment executive is at least 12.0%.

The alternative hypothesis is the statement that we are trying to prove or disprove. In this case, the alternative hypothesis is that the average yearly rate of return on the stocks recommended by the investment executive is less than 12.0%.

Since we are trying to disprove the null hypothesis, we are conducting a one-tailed test. In a one-tailed test, we only reject the null hypothesis if the sample statistic falls in the rejection region, which is located in the tail of the distribution that is opposite to the direction of the alternative hypothesis.

In this case, the rejection region is to the left of the hypothesized mean (Mu=12%). This is because the alternative hypothesis is that the average yearly rate of return is less than 12.0%.

Therefore, the correct alternative hypothesis is Mu<12%. Option D is answer.