A stock analyst wondered whether the mean rate of return of financial, energy and utility stocks differed over the past 5 years. He obtained a simple random sample of eight companies from each of the three sectors and obtained the 5-year rates of return shown in the following table (in percents): Financial Energy Utilities 10.76 12.72 11.88 15.05 13.91 5.86 17.01 6.43 13.46 5.07 11.19 9.90 19.50 18.79 3.95 8.16 20.73 3.44 10.38 9.60 7.11 6.75 17.40 15.70 Source: Morningstar.com Required: (a) State the null and alternative hypothesis. (b) Are the mean rates of return different at the alpha = 0.05 level of significance? Please explain your answer, citing numeric and other evidence in support of your response.
A stock analyst wondered whether the mean rate of return of financial, energy and utility stocks differed over the past 5 years. He obtained a simple random sample of eight companies from each of the three sectors and obtained the 5-year rates of return shown in the following table (in percents):
|
Financial |
Energy |
Utilities |
|
10.76 |
12.72 |
11.88 |
|
15.05 |
13.91 |
5.86 |
|
17.01 |
6.43 |
13.46 |
|
5.07 |
11.19 |
9.90 |
|
19.50 |
18.79 |
3.95 |
|
8.16 |
20.73 |
3.44 |
|
10.38 |
9.60 |
7.11 |
|
6.75 |
17.40 |
15.70 |
Source: Morningstar.com
Required:
(a) State the null and alternative hypothesis.
(b) Are the mean rates of return different at the alpha = 0.05 level of significance? Please explain your answer, citing numeric and other evidence in support of your response.
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