Fc 10 Data Sets Below: Thank You! 10. Chapter 10 Review, Problem 4 Aa Aa How pro
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Fc 10
Data Sets Below: Thank You!
10. Chapter 10 Review, Problem 4 Aa Aa How profitable are different sectors of the stock market? one way to answer such a question is to examine profit as a percentage of stockholder equity. A random sample of 32 retail stocks such as Toys R" Us, Best Buy, and Gap was studied for x1, profit as a percentage of stockholder equity. The result was R 13.7. A random sample of 34 utility (gas and electric) stocks such as Boston Edison, Wisconsin Energy, and Texas utilities was studied for x2, profit as a percentage of stockholder equity. The result was x2 1 (Source: Fortune 500 vol. 135, No. 8). Assume that 01 4.1 and 02 2.7 Let H1 represent the population mean profit as a percentage of stockholder equity for retail stocks, and let H2 represent the population mean profit as a percentage of stockholder equity for utility stocks.Explanation / Answer
95% CI, 1.91% to 5.29%
You used the standard normal distribution with no condition on d.f. because this is an independent samples estimate for a difference of population means and n1>= 30 and n2 >= 30.
Because the interval contains only positive values, it does appear at 95% confidence level that the profits as a percentage of stockholder equity for retail stock is different from that for utility stocks.
Below are the null and alternate hypothesis
H0: mu1 <= mu2
H1: mu1 > mu2
Test statistics = 4.186
Sketch (c) indicates the p-value.
p-value < 0.0002
You reject the null hypothesis becasue p-value <= alpha.
At the 1% significane, the evidence is sufficient to indicate that the profit as a percentage of stockholder equity for retail stock is hight that that for utility stocks.
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