Some have argued that throwing at the stock pages to decide which companies to i

Question

Some have argued that throwing at the stock pages to decide which companies to invert in could be a successful stock picking strategy Suppose a researcher decided to test this theory and randomly chooses 150 companies to invert in After 1 year, 78 of the companies were considered winners, that is, they outperformed other companies in the same investment class. To access weather the dart - picking strategy resumed in a majority of winner, the researcher tested H_0: p = 0.5 versus H_1:p>0.5 and obtained a p - value of 0.3121. Explain what this p - value means and write a conclusion for the researcher. (Assume alpha is 0.1 or less.) Choose a correct explanation below. A. About 31 in 100 samples will give a sample proportion as high or higher than one obtained if the population proportion really is 0.5. B. About 31 in 100 samples will give a sample proportion as high or higher than one obtained if the population proportion really is greater than 0.5. C. About 78 in 150 samples will give a sample proportion as high or higher than one obtained if the population proportion really is greater than 0.5 D. About 78 in 150 samples will give a sample proportion as high or higher than one obtained if the population proportion really is 0.5. Choose the correct conclusion below. A. Because this probability is small, do not reject the null hypothesis. There is not sufficient evidence to conclude that the dart - picking strategy resulted in a majority of winners. B. Because this probability is small, reject the null hypothesis. There is sufficient evidence to conclude that the dart - picking strategy resulted in a majority of winners. C. Because this probability is not small, do not reject the null hypothesis. There is not sufficient evidence to conclude that the dart - picking strategy resulted in a majority of winners. D. Because this probability is not small, reject the null hypothesis. There is sufficient evidence to conclude that the dart - picking strategy resulted in a majority of winners.

Explanation / Answer

1) Since the sample proportion is 78 out of 150,

and the null hypothesis is p=0.5

So option D) is correct

2) As the P-values if greater than the significance level So we faile to reject the null hypothesis

Thus option C) is correct

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