Stocks can be categorized by industry. The following data represent the 5-year r

Question

Stocks can be categorized by industry. The following data represent the 5-year rates of return for a simple random sample of financial stocks and energy stocks. Compute the mean and median rate of return for each industry. Which sector has the higher mean rate of return? Which sector has the higher median rate of return? Sample mean for financial stocks (Type an integer or decimal rounded to three decimal places as needed.) Sample mean for energy stocks (Type an integer or decimal rounded to three decimal places as needed.)

Explanation / Answer

Sum of Financial Stocks: 496.76

Sum of Energy Stocks: 353.71

Simple mean for Financial Stocks: 496.76/20 = 24.838

Median for financial stocks: (21.93 + 22.14)/2 = 22.035

Sample mean for energy stocks = 353.71/20 = 17.686

Median for energy stocks = (14.77 + 15.04)/2 = 14.905

Which sector has the higher mean rate of return?

The financial stocks have the higher mean rate of return. (24.838 is greater than 17.686)

Which sector has the higher median rate of return?

The financial stock has the higher median rate of return (22.035 is greater than 14.905)

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