Answer: H₁ : μ > 14%

Since the researcher wants to test that if the mean of 50 small-cap stocks is greater than 14%, the null hypothesis is H₀ : μ ≤ 14% and the alternative hypothesis is H₁ : μ > 14%. We always want to reject the null hypothesis and accept the alternative. Since the researcher wants to prove that the mean returns are greater than 14%, the alternative hypothesis is H₁ : μ > 14%.

Author: Tanishq Prabhu