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Rates of Return A stock analyst wondered whether the mean
Chapter 1, Problem 17AYU(choose chapter or problem)
Problem 17AYU
Rates of Return
A stock analyst wondered whether the mean rate of return of financial, energy, and utility stocks differed over the past 5 years. He obtained a simple random sample of eight companies from each of the three sectors and obtained the 5-year rates of return shown in the following table (in percent):
(a) State the null and alternative hypotheses.
(b) Verify that the requirements to use the one-way ANOVA procedure are satisfied. Normal probability plots indicate that the sample data come from normal populations.
(c) Are the mean rates of return different at the α = 0.05 level of significance?
(d) Draw boxplots of the three sectors to support the results obtained in part (c).
Questions & Answers
QUESTION:
Problem 17AYU
Rates of Return
A stock analyst wondered whether the mean rate of return of financial, energy, and utility stocks differed over the past 5 years. He obtained a simple random sample of eight companies from each of the three sectors and obtained the 5-year rates of return shown in the following table (in percent):
(a) State the null and alternative hypotheses.
(b) Verify that the requirements to use the one-way ANOVA procedure are satisfied. Normal probability plots indicate that the sample data come from normal populations.
(c) Are the mean rates of return different at the α = 0.05 level of significance?
(d) Draw boxplots of the three sectors to support the results obtained in part (c).
ANSWER:
Problem 17AYU
Answer:
Step1:
a). Consider the null and alternative hypotheses are
: The mean rate of return of financial, energy, and utility stocks is differed over the past 5 years.
The mean rate of return of financial, energy, and utility stocks is not differed over the past 5 years.
With 0.05 level of significance
b).The requirements that must be satisfied to use the oneway ANOVA procedure:
1).There must be k simple random samples, one from each of k populations or a randomized experiment with k treatments.
2).The k samples must be independent of each other
3).The populations must be normally distributed.
4).The populations must have the same variance
c). to check whether mean rates of return different at the α = 0.05 level of significance we need to find one way ANOVA and it can be calculated by using excel, steps are as follows:
1).first step is to enter the given data in excel sheet
2).choose data in that select single one way ANOVA then input all the data what we have entered in excel sheet
3).select level of significance = 0.05
4) select output range then press ok we will get result as follows:
ANOVA | ||||||
Source of Variation |
SS |
df |
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