show all work in deriving your answer manually Included is a population of 200 s

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show all work in deriving your answer manually

Included is a population of 200 stocks listed as IBD's Top 200 Composite Stocks for Thursday, November 19, 2009. There are four columns of stocks with various types of data on each stock. Within the data is each "Stock" name and "Closing Price". For example, the name of the first Stock in the population is "RINO Inti n" and its Closing Price was "28.14", with Closing Prices listed in dollars. The name of the last Stock in the population is "Patni" and its Closing Price was $"20.90". Run a Hypothesis Test, at the .05 level of significance, to see if the mean Closing Price of IBD's Top 200 Composite Stocks listed on Thursday, November 19, 2009 was greater than $65. In running the test, select a random sample of 12 Stocks and their Closing Prices. Use the Table of Random Numbers in Appendix B of the textbook to pick the specific Stocks and their Closing Prices for inclusion in the sample. Start the sample selection process at Row 1, Column 1, of the table and read and group the random numbers as you go across the row. You must explain how you gleaned the 12 Stocks in your sample. Because all students are using the same method to select the 12 Stocks Closing Prices, every student should have th,e same sample observations and sample statistics. For this test, assume the population of Stock Closing Prices is normally distributed.

Explanation / Answer

Here we are given the data of closing price.

There are 16 observations is the data set.

28.14 16.1 50.28 15 51.45 40 33.18 49.55 12.17 53.74 22.07 16.1

Here we have to test the hypothesis that,

H0 : mu = 65 Vs H1 : mu > 65

where mu is population mean of closing price.

Assume alpha = level of significance = 5% = 0.05

Here we use t-test because sample data is given, sample size is small and population standard deviation is unknown.

This we can done by using TI-83 calculator.

steps :

STAT --> ENTER --> enter all the data in L1 --> STAT --> TESTS --> 2: T-Test --> ENTER --> Inpt : Highlight on Data --> ENTER --> mu0 = 65 --> List : select L1 (key : 2nd + 1) --> Freq : 1 --> select alternative " >mu0 " --> ENTER --> Calculate --> ENTER

Output :

test statistic t = -7.0235

P-value = 0.99998899

P-value > alpha

Accept H0 at 5% level of significance.

Conclusion : There is not sufficient evidence to say that mean closing price > $65.

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