1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars sued his broker because lack of diversification in his portfolio led to poor performance (low returns) The table below gives the rates in percentages for the 39 months that the account was managed by the broker. An arbitration panel composed these returns with average of the Standard and Poor's stock index for the same period. Consider the 39 SRS monthly returns the broker would generate if he managed the account forever. Are these returns compatible with a population mean of .95%, the S&P 500 averaged over 35 years? The numbers are already in percentages. -8.36 1.62 -2.27 -2.93 -2.7 6.82 -2.93 -1.03 4.34 12.03 -9.14 -9.16 12.22 -2.64 -2.35 -1.22 -3.58 -5.11 5.04 6.13 -.8 -7.24 7.00 -1.44 -15.25 1.28 -1.01 -8.66 -.65 -1.25 -7.21 4.33 -.09 2.35 -10.27 7.34 -2.14 -1.41 -2.56 a. Test the investors' claim at the alpha level .05 significance level. (name the hypotheses, parameter, type of test and make sure the condition are met) b. Find and interpret the C.I. that coincide with the alpha level given. c. Describe the Type I and Type II Eror in words. Which error is the most serious in term of the person suing?

1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars sued his broker because lack of diversification in his portfolio led to poor performance (low returns) The table below gives the rates in percentages for the 39 months that the account was managed by the broker. An arbitration panel composed these returns with average of the Standard and Poor's stock index for the same period. Consider the 39 SRS monthly returns the broker would generate if he managed the account forever. Are these returns compatible with a population mean of .95%, the S&P 500 averaged over 35 years? The numbers are already in percentages. -8.36 1.62 -2.27 -2.93 -2.7 6.82 -2.93 -1.03 4.34 12.03 -9.14 -9.16 12.22 -2.64 -2.35 -1.22 -3.58 -5.11 5.04 6.13 -.8 -7.24 7.00 -1.44 -15.25 1.28 -1.01 -8.66 -.65 -1.25 -7.21 4.33 -.09 2.35 -10.27 7.34 -2.14 -1.41 -2.56 a. Test the investors' claim at the alpha level .05 significance level. (name the hypotheses, parameter, type of test and make sure the condition are met) b. Find and interpret the C.I. that coincide with the alpha level given. c. Describe the Type I and Type II Eror in words. Which error is the most serious in term of the person suing?

Name: 1. Diversty or be Sued! An investor with a stock portfolio worth seve
Uploaded: 2024-03-20T07:07:00.000Z
Channel: Bartleby
Description: 1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars suedhis broker because lack of diversification in his portfolio led to poor performance (low returns) Thetable below gives the rates in percentages for

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

See similar textbooks

Related questions

Q: 5. Your firm produces car oil-pan gaskets. The machine used typically produces 98% (.98) that are…

A: 5. The null and alternative hypotheses need to be tested: Ho: p = 0.02Ho:p=0.02 Ha: p &gt;…

Q: How many items should the company sell to maximize profit? (to the nearest thousand items)

A: Here given profit function is. .differentiating it twice with respect to x, we get No for stationary…

Q: Discuss two limitations of relying on a margin of safety when predicting future sales. Would you…

A: The margin of safety is a financial metric that measures the difference between the actual sales and…

Q: The Majoring in Money study by Sallie Mae from December 2015 showed that most college students…

A: According to the given information in this question Population proportion= 0.23 sample size = 380…

Q: Symbol Company Price ($) Yield AT&T 33.59 5.48% Vz Verizon 46.78 4.70% CVX Chevron 112.18 3.82% MCD…

A: Ans. Here first we have to calculate numer of companies with yields of 3.25% or more then from this…

Q: Returns earned over a given time period are called realized returns. Historical data on realized…

A: Given data : Year Return (%) 2014 8.75 2015 5.95 2016 10.5 2017 14.7 2018 4.55

Q: The delta of an underlying asset (such as a stock) is 1.00 and therefore it can be used to hedge…

A: The given statement is the delta of an underlying asset (such as a stock) is 1.00 and therefore it…

Q: The "Dogs of the Dow" are the stocks listed on the Dow with the highest dividend yield. The…

A: The data values are given below:SymbolCompanyPrice ($) as of 12/31/2020Yield as of…

Q: The table below contains monthly share prices for Pfizer Inc. (PFE) and Astrazeneca Plc. (AZN). It…

A: Note: As per the guidelines, in case of multiple subparts, answer to first three subparts will be…

Q: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the…

Q: Liabilities for your project are $120,000, and assets are only $100,000. What is the Working…

A: Working capital ratio is the ratio of assets and liabilities.

Q: Eusmel Inc. is considering a project that has the following cash flow data. What is the project's…

Q: You are a public relations advisor for local firefighters who are threatening to strike on the…

A: From the given information we find the correct solution.

Q: Farfetch announces a positive surprise with respect to earnings on March 1. On that same day, the…

A: Yes, this is consistent with the concept of market efficiency. The semi-strong form of market…

Q: To analyze the risk, or volatility, associated with investing in General Electric common stock,…

A: Given information: x20282.24-20.5561.6912.28112.688.3610.553.29-5.881-18.7479.6115.3146.41

Q: (a) The minimum UGPA that would still place a student in the top 5% of UGPAS is. (Round to two…

A: u = 3.28 sigma =0.19

Q: TWENTY ) (d) Find the p-value. (Round to three or more decimal places.) (e) Is there enough…

A: We need to answer two parts

Q: J. C. Penney Company, Inc. (JCP) and Macy’s, Inc. (M) are large department store chains in the…

A: The objective of this question is to calculate the days’ cash on hand for J. C. Penney and Macy’s.…

Q: The following table reports a portion of the annual returns (in percent) for these two funds from…

A: Explanation : You have written your data set like 2000-2.16-18.57 and so on. So I will consider ,…

Q: A survey is conducted on 700 Californians older than 30 years of age. The study wants to obtain…

A: The question is about regressionGiven :Estimate of " Intercept " = 25200.25 Estimate of " Education…

Q: А 9 5 9 8 C 6. n(A) = %3D n(AnC) = %3D n(ANBNC) = 69

A: The objective is to find,

Q: b) Explain what is meant by the internal rate of return (IRR) in the context of project appraisal.…

A: The internal rate of return is the discount rate that sets the present value of all cash inflows of…

Q: You decide to make a small portfolio consisting of a collection of 6 of the top 10 Dogs of the Dow.…

Q: Suppose that a set of portfolio managers has a chance p = 50% of beating the market by 10% in a…

A: To solve problems involving probabilities and expected values, we can use combinatorics and the…

Q: In a table of “Sales as a % of Moving Average” over a 5-year period the adjusted average of the four…

Q: If the expected return on the market is 8% and the risk free rate is 4% and the expected return is…

A: Expected return on the market=8% Risk free rate = 4% Expected return= 12% Market risk premium=?

Q: Returns earned over a given time period are called realized returns. Historical data on realized…

A: The total number of observations is .The historical returns for Celestial Crane Cosmetics Inc. (CCC)…

Concept explainers

2-Proportion Test

In a 2-proportion test, two separate proportions are measured at the same time, and their similarity is evaluated. It is also known as a 2-proportion z-test, and a comparison of two different proportions is done in this method.

Topic Video

Question

1. Diversty or be Sued! An investor with a stock portfolio worth several hundred thousand dollars sued
his broker because lack of diversification in his portfolio led to poor performance (low returns) The
table below gives the rates in percentages for the 39 months that the account was managed by the
broker. An arbitration panel composed these returns with average of the Standard and Poor's stock
index for the same period. Consider the 39 SRS monthly returns the broker would generate if he
managed the account forever. Are these returns compatible with a population mean of .95%, the S&P
500 averaged over 35 years? The numbers are already in percentages.
-2.93
-15.25
1.28
-1.01
-8.36
1.62
-2.27
-2.7
-2.93
-9.14
-2.64
6.82
-2.35
-3.58
-5.11
5.04
-9.16
12.22
-2.56
-1.25
-7.21
4.33
6.13
7.00
-1.44
-2.14
-8.66
-65
-1.41
-1.03
4.34
-1.22
-.09
2.35
-10.27
7.34
-7.24
12.03
Test the investors' claim at the alpha level .05 significance level. (name the hypotheses,
parameter, type of test and make sure the condition are met)
b. Find and interpret the C.I. that coincide with the alpha level given.
c. Describe the Type I and Type II Error in words. Which error is the most serious in tem of the
person suing?
a.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

$Hypothesis Tests and Confidence Intervals for Proportions$

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.

Similar questions

What can you say about the interest ratings of boys and girls for these topics?
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large-Company US Treasury Bill 1 3.97 6.59 2 14.34 4.42 3 19.23 4.29 4 −14.45 7.32 5 −31.94 5.28 6 37.47 5.38 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer…
Straight-line DepreciationBook value is the value of an asset that a company uses to create its balance sheet.Some companies depreciate their assets using straight-line depreciation so that thevalue of the asset declines by a fixed amount each year. The amount of the declinedepends on the useful life that the company assigns to the asset. Suppose that acompany just purchased a fleet of new cars for its sales force at a cost of $31,500 percar. The company chooses to depreciate each vehicle using the straight-line methodover 7 years. This means that each car will depreciate by +31,500 7 = +4500 per year.(a) Write a linear function that expresses the book value V of each car as a functionof its age, x.(b) Graph the linear function.(c) What is the book value of each car after 3 years?(d) Interpret the slope.(e) When will the book value of each car be $9000?[Hint: Solve the equation V1x2 = 9000.]
The accompanying data represent the annual rates of return of two companies' stock for the past 12 years. Complete parts (a) through (k). O A. OB. 0.50- 0.50- 0.00- 0.00- -0.50- -0.50- -0.3 RR of Company 2 0.0 0.3 -0.3 0.0 0.3 RR of Company 1 OC. 0.30- 0.50- 0.00- 0.00- -0.30- -0.50- o.0 0'5 0.0 0.3 -0.5 RR of Company 2 0.5 -0.3 RR of Company 1 (b) Determine the correlation coefficient between rate of return of Company 1 and Company 2. The correlation coefficient is 0.966. (Round to three decimal places as needed.) (c) Based on the scatter diagram and correlation coefficient, is there a linear relation between rate of return of Company 1 and Company 2? Yes No (d) Find the least-squares regression line treating the rate of return of Company 1 as the explanatory variable. y=x+O (Round to four decimal places as needed.) RR of Company 1 RR of Company 1 RR of Company 2 RR of Company 2
Consider each of the after-tax cash flows shown in the table below. Suppose that projects B and C are mutually exclusive. Suppose also that the required service period is eight years and that the company is considering leasing comparable equipment with an annual lease expense of $3,000, payable at the end of each year for the remaining years of the required service period. Which project is a better choice at 15%? Click the icon to view the cash flows for the projects. Click the icon to view the interest factors for discrete compounding when i=15% per year. The present worth of project B is $thousand. (Round to one decimal place.) More Info Capital Single Payment Compound Amount Factor (F/P, i, N) Equal Payment Series Sinking Present Fund Worth Factor Factor (A/F, i, N) Compound Amount Factor (F/A, i, N) 1.0000 More Info Recovery Factor (A/P, i, N) 1.1500 (P/A, i, N) 1.1500 1.0000 0.8696 1.3225 2.1500 0.4651 1.6257 0.6151 B с 1.5209 3.4725 0.2880 2.2832 0.4380 - $7,000 -$5,000 1.7490…
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Y Time: 1 2 3 4 Cash flow: -$8,000 $3,350 $4,180 $1,520 $300
5. Martina's employer offers anannual pension benefit calculated by multiplying 2.35% of the career average salary times the number of years employed. Here are Martina's annual salaries over the last 24 years of employment. 28,800 29,300 30,250 31,000 35,500 42,000 45,000 50,000 28,800 29,900 30,350 35,000 35,700 43,000 48,000 52,000 29,210 29,900 30,450 35,000 38,000 43,900 48,800 52,000 a. What is Martina's career average salary? b. What is Martina's annual pension under this plan? c. What percentage of her final annual salary will her annual retirement salary be to the nearest percent? d. What is Martina's monthly pension benefit to the nearest penny?
21. The income statement for Otto Construction Company appear below: Net sales (all credit sales) $180000 Cost of goods sold 100000 Gross margin 80000 Operating expenses 30000 Interest expense 12000 Income before taxes 38000 Income tax 9500 Net income $28500 Average total assets total $240000. Otto’s income tax rate is 25%.What is the gross margin percentage? (a) 12.5% (b) 15.8% (c) 33.3% (d) 44.4%