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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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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