How profitable are different sectors of the stock market? One way to answer such a question is to examine profit as a percentage of stockholder equity. A random sample of 32 retail stocks such as Toys 'R' Us, Best Buy, and Gap was studied for x1, profit as a percentage of stockholder equity. The result was x1 = 14.0. A random sample of 36 utility (gas and electric) stocks such as Boston Edison, Wisconsin Energy, and Texas Utilities was studied for x2, profit as a percentage of stockholder equity. The result was x2 = 10.3. Assume that ?1 = 4.5 and ?2 = 3.0.(a) Categorize the problem below according to parameter being estimated, proportion p, mean ?, difference of means ?1 – ?2, or difference of proportions p1 – p2. Then solve the problem.p1 – p2?1 – ?2 ?p(b) Let ?1 represent the population mean profit as a percentage of stockholder equity for retail stocks, and let ?2 represent the population mean profit as a percentage of stockholder equity for utility stocks. Find a 99% confidence interval for ?1 – ?2. (Use 1 decimal place.)lower limit upper limit (c) Examine the confidence interval and explain what it means in the context of this problem. Does the interval consist of numbers that are all positive? all negative? of different signs? At the 99% level of confidence, does it appear that the profit as a percentage of stockholder equity for retail stocks is higher than that for utility stocks?Because the interval contains only positive numbers, we can say that the profit as a percentage of stockholder equity is higher for retail stocks.Because the interval contains both positive and negative numbers, we can not say that the profit as a percentage of stockholder equity is higher for retail stocks. We can not make any conclusions using this confidence interval.Because the interval contains only negative numbers, we can say that the profit as a percentage of stockholder equity is higher for utility stocks.

Given Data : For Sample 1 x̄1 = 14 n1 = 32 σ1= 4.5 For Sample 2…

Answered: How profitable are different sectors of…

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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How profitable are different sectors of the stock market? One way to answer such a question is to examine profit as a percentage of stockholder equity. A random sample of 32 retail stocks such as Toys 'R' Us, Best Buy, and Gap was studied for x₁, profit as a percentage of stockholder equity. The result was x₁ = 14.0. A random sample of 36 utility (gas and electric) stocks such as Boston Edison, Wisconsin Energy, and Texas Utilities was studied for x₂, profit as a percentage of stockholder equity. The result was x₂ = 10.3. Assume that ?₁ = 4.5 and ?₂ = 3.0.

(a) Categorize the problem below according to parameter being estimated, proportion p, mean ?, difference of means ?₁ – ?₂, or difference of proportions p₁ – p₂. Then solve the problem.

p₁ – p₂?₁ – ?₂ ?p

(b) Let ?₁ represent the population mean profit as a percentage of stockholder equity for retail stocks, and let ?₂ represent the population mean profit as a percentage of stockholder equity for utility stocks. Find a 99% confidence interval for ?₁ – ?₂. (Use 1 decimal place.)

lower limit
upper limit

(c) Examine the confidence interval and explain what it means in the context of this problem. Does the interval consist of numbers that are all positive? all negative? of different signs? At the 99% level of confidence, does it appear that the profit as a percentage of stockholder equity for retail stocks is higher than that for utility stocks?

Because the interval contains only positive numbers, we can say that the profit as a percentage of stockholder equity is higher for retail stocks.Because the interval contains both positive and negative numbers, we can not say that the profit as a percentage of stockholder equity is higher for retail stocks. We can not make any conclusions using this confidence interval.Because the interval contains only negative numbers, we can say that the profit as a percentage of stockholder equity is higher for utility stocks.

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