370 WEB file NYSEStocks Chapter 8 Interval Estimation moign 47. Many stock market observers say that when the P/E ratio for stocks gets over 20 the market is overvalued. The P/E ratio is the stock price divided by the most recent 12 months of Suppose you are interested in seeing whether the current market is overvalued and would also like to know what proportion of companies pay dividends. A random sample of 30 companies listed on the New York Stock Exchange (NYSE) is provided (Barron's, January 19, 2004). f earnings. Company Albertsons BRE Prop CityNtl DelMonte EnrgzHldg Ford Motor Gildan A HudsnUtdBcp IBM Jeff Pilot KingswayFin Libbey MasoniteIntl Motorola Ntl City a. Dividend Yes Yes Yes No No Yes No Yes Yes Yes No Yes No Yes Yes P/E Ratio 14 18 16 21 20 22 12 13 22 16 6 13 15 68 10 Company NY Times A Omnicare PallCp PubSvcEnt SensientTch SmtProp TJX Cos Thomson USB Hldg US Restr Varian Med Visx Waste Mgt Wiley A Yum Brands Dividend Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No Yes No P/E Ratio 25 25 23 11 11 12 21 30 12 26 41 72 23 21 18 What is a point estimate of the P/E ratio for the population of stocks listed on the New York Stock Exchange? Develop a 95% confidence interval. C. b. Based on your answer to part (a), do you believe that the market is overvalued? What is a point estimate of the proportion of companies on the NYSE that pay divi- dends? Is the sample size large enough to justify using the normal distribution to con- struct a confidence interval for this proportion? Why or why not?
370 WEB file NYSEStocks Chapter 8 Interval Estimation moign 47. Many stock market observers say that when the P/E ratio for stocks gets over 20 the market is overvalued. The P/E ratio is the stock price divided by the most recent 12 months of Suppose you are interested in seeing whether the current market is overvalued and would also like to know what proportion of companies pay dividends. A random sample of 30 companies listed on the New York Stock Exchange (NYSE) is provided (Barron's, January 19, 2004). f earnings. Company Albertsons BRE Prop CityNtl DelMonte EnrgzHldg Ford Motor Gildan A HudsnUtdBcp IBM Jeff Pilot KingswayFin Libbey MasoniteIntl Motorola Ntl City a. Dividend Yes Yes Yes No No Yes No Yes Yes Yes No Yes No Yes Yes P/E Ratio 14 18 16 21 20 22 12 13 22 16 6 13 15 68 10 Company NY Times A Omnicare PallCp PubSvcEnt SensientTch SmtProp TJX Cos Thomson USB Hldg US Restr Varian Med Visx Waste Mgt Wiley A Yum Brands Dividend Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No Yes No P/E Ratio 25 25 23 11 11 12 21 30 12 26 41 72 23 21 18 What is a point estimate of the P/E ratio for the population of stocks listed on the New York Stock Exchange? Develop a 95% confidence interval. C. b. Based on your answer to part (a), do you believe that the market is overvalued? What is a point estimate of the proportion of companies on the NYSE that pay divi- dends? Is the sample size large enough to justify using the normal distribution to con- struct a confidence interval for this proportion? Why or why not?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:370
WEB file
NYSEStocks
18
Chapter 8 Interval Estimation
Moign
47. Many stock market observers say that when the P/E ratio for stocks gets over 20 the market is
overvalued. The P/E ratio is the stock price divided by the most recent 12 months of earnings.
Suppose you are interested in seeing whether the current market is overvalued and would also
like to know what proportion of companies pay dividends. A random sample of 30 companies
listed on the New York Stock Exchange (NYSE) is provided (Barron's, January 19, 2004).
Company
Albertsons
BRE Prop
CityNtl
DelMonte
EnrgzHldg
Ford Motor
Gildan A
HudsnUtdBcp
IBM
JeffPilot
Kingsway Fin
Libbey
Masonite Intl
Motorola
Ntl City
a.
Dividend
Yes
Yes
Yes
No
No
Yes
No
Yes
Yes
Yes
No
Yes
No
Yes
Yes
P/E Ratio
14
18
16
21
20
22
12
13
22
16
6
13
15
68
10
Company
NY Times A
Omnicare
PallCp
PubSvcEnt
SensientTch
SmtProp
TJX Cos
Thomson
USB Hldg
US Restr
Varian Med
Visx
Waste Mgt
Wiley A
Yum Brands
Dividend
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
Yes
No
P/E Ratio
25
25
23
11
11
12
21
30
12
26
41
72
23
21
18
What is a point estimate of the P/E ratio for the population of stocks listed on the New
York Stock Exchange? Develop a 95% confidence interval.
C.
b. Based on your answer to part (a), do you believe that the market is overvalued?
What is a point estimate of the proportion of companies on the NYSE that pay divi-
dends? Is the sample size large enough to justify using the normal distribution to con-
struct a confidence interval for this proportion? Why or why not?
US Airways conducted a number of studies that indicated a substantial savings could be
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