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 110 188 The analyst claims that there is an increasing trend for every new year for investing the money to stock exchange. That means the ratio of people who invest their money to "stock" in 2015 is bigger than that of in 2010. (H1: P2010 < P2015) Calculate test statistics.
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
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