In order to test if the mean returns on a major index have c

In order to test if the mean returns on a major index have changed from the historic average of 1.2% a sample of 36 recent monthly returns is used to calculate the value of the relevant test statistic. At the 5% level of significance, we reject the null hypothesis if this value is

Solution

We reject Ho if t is > 2.03 and t < -2.03

We get this value using excel function tinv(0.05,35)