45. Bullish, Neutral, or Bearish. The American Association of Individual Investors conducts a weekly survey of its members to measure the percent who are bullish, bearish, and neutral on the stock market for the next six months. For the week ending November 7, 2012, the survey results showed 35.0% bullish, 38.6% neutral, and 26.4% bearish. Assume these results are based on a sample of 300 AAII members. A. Over the long term, the proportion of bullish AAII members is .39. Conduct a hypothesis test at the 5% level of significance to see if the current sample results show that bullish sentiment differs from its long-term average of .39. What are your findings? B. Over the long term, the proportion of bearish AAII members is .30. Conduct a hypothesis test at the 1% level of significance to see if the current sample results show that bearish sentiment is below its long term average of .30. What are your findings? C. Would you feel comfortable extending these results to all investors? Why or why not?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
45. Bullish, Neutral, or Bearish. The American Association of Individual Investors conducts a weekly survey of its members to measure the percent who are bullish, bearish, and neutral on the stock market for the next six months. For the week ending November 7, 2012, the survey results showed 35.0% bullish, 38.6% neutral, and 26.4% bearish. Assume these results are based on a sample of 300 AAII members.
A. Over the long term, the proportion of bullish AAII members is .39. Conduct a hypothesis test at the 5% level of significance to see if the current sample results show that bullish sentiment differs from its long-term average of .39. What are your findings?
B. Over the long term, the proportion of bearish AAII members is .30. Conduct a hypothesis test at the 1% level of significance to see if the current sample results show that bearish sentiment is below its long term average of .30. What are your findings?
C. Would you feel comfortable extending these results to all investors? Why or why not?
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