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Name: A portfolio manager was analyzing the price-earnings ratio for this ye
Uploaded: 2024-03-20T07:07:12.000Z
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Description: A portfolio manager was analyzing the price-earnings ratio for this year’s performance. His boss said that the average price-earnings ratio was 20 for the many stocks that his firm had traded, but he felt that figure was too high. The portfolio manag

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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A portfolio manager was analyzing the price-earnings ratio for this year’s performance. His boss said that the average price-earnings ratio was 20 for the many stocks that his firm had traded, but he felt that figure was too high. The portfolio manager randomly selected a sample of 50 P/E ratios and found a mean of 18.17 and standard deviation of 4.60. Assume that the population is normally distributed and test at the 0.01 level of significance.

Select one:

True

False

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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