3-USE 3 DECIMALSA financial analyst wants to understand the preference of the people investment strategy. A randomly selectedpeople asked a question about the preference investment on their money either on "real estate" or "stockmarket". After collecting a data some statistical analysis is done to understand the main question of the analyst.Here is the financial analyst thought:A financial analyst thinks that there is a decreasing ratio on investing the money to "stock" for last 5 years.In order to test the decrease of the preference on stock a research is done and the following numbers arecollected in 2010 and 2015.2015 2010Number of people asked250 400Number of people who prefer stock 100 210CeThe analyst claims that there is a decreasing trend for every new year for investing themoney to stock. That means the ratio of people who invest their money to "stock" in2015 is less than that of in 2010. (H1: P2010 > P2015)Calculate test statistics.

Answered: 3- USE 3 DECIMALS A financial analyst…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

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Question

3-
USE 3 DECIMALS
A financial analyst wants to understand the preference of the people investment strategy. A randomly selected
people asked a question about the preference investment on their money either on "real estate" or "stock
market". After collecting a data some statistical analysis is done to understand the main question of the analyst.
Here is the financial analyst thought:
A financial analyst thinks that there is a decreasing ratio on investing the money to "stock" for last 5 years.
In order to test the decrease of the preference on stock a research is done and the following numbers are
collected in 2010 and 2015.
2015 2010
Number of people asked
250 400
Number of people who prefer stock 100 210
Ce
The analyst claims that there is a decreasing trend for every new year for investing the
money to stock. That means the ratio of people who invest their money to "stock" in
2015 is less than that of in 2010. (H1: P2010 > P2015)
Calculate test statistics.

Expert Solution

Two sample proportions z test :

The two sample proportions z test is used test the significant difference between two sample proportions and the z test statisitc is given by

$z = \frac{p_{1} - p_{2}}{\sqrt{P (1 - P) \times [\frac{1}{n_{1}} + \frac{1}{n_{2}}]}} \to w h e r e p_{1}, p_{2} a r e t h e t w o s a m p l e p r o p o r t i o n s P i s t h e p o o l e d p r o p o r t i o n a n d i t i s d e f i n e d a s b e l o w P = \frac{x_{1} + x_{2}}{n_{1} + n_{2}} x_{1}, x_{2} a r e t h e f a v o r e v e n t s n_{1}, n_{2} a r e t h e t w o s a m p l e s i z e s$